(Bloomberg) -- The dollar may weaken toward the post-World War II low of 79.75 yen after climbing to about 103 yen in the coming weeks, according to Mizuho Financial Group Inc.The level of 103 yen is the top of a so-called ichimoku cloud where sell orders may be triggered, causing the dollar to approach 79.75 yen, the post-war low set in April 1995, said Hiroyuki Tanaka at Mizuho Corporate Bank in Tokyo, a unit of Japan’s third-largest lender.
“The real game starts when dollar-yen hits the cloud,” said Tanaka, the bank’s chief technical analyst. The dollar’s path resembles the currency’s movements from March to August 2008 after the near-collapse of Bear Stearns Cos., he said.The dollar tumbled to a 13-year low of 87.13 yen on Jan. 21 after the previous occasion the greenback failed to break through a cloud pattern. The dollar is entering the cloud for a second time after reaching a “double-bottom” of about 87.10 in December and January, according to Tanaka.
The dollar may rally to 117 yen next year should it break through the resistance level of 103 yen, Tanaka said. The yen traded at 99.07 against the dollar as of 9:12 a.m. in Tokyo from 98.98 late in New York yesterday.An ichimoku chart analyzes the midpoints of historic highs and lows. A cloud is the area between the first and second leading span lines on the chart and is used to show levels where buy and sell orders may be clustered.
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