David Woo: MACD was 0.0753 today, above the signal line of minus

U.S. Dollar May Climb to Seven-Week High Against Yen: Technical Analysis
By Ron Harui - Nov 15, 2010 3:09 PM PT Tweet (2)LinkedIn Share
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Play VideoNov. 15 (Bloomberg) -- David Woo, head of global rates and currency research at Bank of America Merrill Lynch, talks about the impact of a lower dollar on the U.S. trade deficit. Woo also discusses Federal Reserve monetary policy and Europe's sovereign debt crisis. He talks with Tom Keene on Bloomberg Television's "Midday Surveillance." (Source: Bloomberg)


Play VideoNov. 11 (Bloomberg) -- Nick Bennenbroek, head of currency strategy at Wells Fargo & Co, talks with Bloomberg's Mark Crumpton about the outlook for currencies and the G-20 talks in Seoul. Bennenbroek says the U.S. dollar still has "a little bit further to fall." (Source: Bloomberg)
The dollar may rise to a seven-week high against the yen after it closed above resistance at its 50- day moving average, Forecast Pte said, citing trading patterns.

The U.S. currency is poised to extend gains following its biggest weekly rally in almost two months after it ended last week above 82.19 yen, which was resistance on a descending trend line that connected the highs of May 5, June 4 and Sept. 17, said Pak Lai Ng, an analyst at Forecast Pte. The sustained break of its 50-day moving average at 82.67 yen opens the way for the dollar to target the 100-day average at 84.47 yen, he said.

“The dollar-yen is short-term bullish,” Singapore-based Ng said in an interview. “Momentum is up. If you look at the past, the 50-day moving average has been capping it so far.”

The dollar traded at 83.12 yen as of 8:01 a.m. in Tokyo, after rising 3.6 percent from a 15-year low of 80.22 yen on Nov. 1. The greenback gained 1.6 percent last week, the biggest advance since the period ended Sept. 17. It last traded at 84.52 yen on Sept. 24.

Daily momentum indicators such as the moving average convergence/divergence, or MACD, also show the dollar is poised to rise against the yen, Ng said.

The U.S. currency’s MACD was 0.0753 today, above the signal line of minus 0.2724, based on data compiled by Bloomberg. The MACD is calculated by subtracting the 26-day exponential moving average from the 12-day average.

The signal line is a nine-day exponential moving average of the MACD, and provides buy and sell signals. Resistance refers to a level where sell orders may be clustered.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.