Nov 21 2014

Rate Range Projection by Bank 

Next week 117.00- 119.00

Next 3 months 112.00 – 120.00

 

The Swiss lender cited a momentum gauge known as the Fibonacci indicator for its call on Japan’s currency, which tumbled yesterday to a seven-year low of 118.98 per dollar. The yen rebounded 0.3 percent today after Finance Minister Taro Aso said its slide over the past week has been “too fast,” the strongest statement on the currency yet by a top official. The yen’s steepest drop in almost six years is set to stall at 120 per dollar, trading patterns suggest, which would be welcome news for Japanese officials bemoaning the pace of the currency’s decline.“We are looking for consolidation or a potential pullback at 120,” James Lim, a Singapore-based analyst at Credit Suisse Group AG, said today by phone. “We’re looking at 115.50. That’s our pullback target. We look for this to hold before the continuation of the uptrend in dollar-yen.”

 

Credit Suisse Group AG said 120 per dollar represents the 61.8 percent Fibonacci retracement of a 13-year bull run that took Japan’s currency to a record-high of 75.35 in October 2011. Momentum gauges back the assertion that the yen is falling too fast, with a measure known as the moving-average convergence-divergence, or MACD, at the highest level since 1998. The yen “could potentially go to 124, the 2007 high,” Lim said. The yen accelerated its slide versus major peers after the Bank of Japan unexpectedly expanded its record stimulus program on Oct. 31 and Prime Minister Shinzo Abe called a snap election this week. It traded at 118.04 per dollar as of 11:50 a.m. in London.