By TraderVox.com
Tradervox (Dublin) – Bank of America has indicated that the dollar might be forming a base to surge against the Japanese currency over the longer-term. Recently, the dollar has declined bellow the two month resistance of 80.22 yen. However, according to MacNeil Curry who is the head of Foreign Exchange and Interest Rates Technical Strategy at Bank of America, a close above the 80.22 yen level would signal the start of the dollar’s uptrend against the yen.
Despite the bearish trend of the USD/JPY cross, the US currency has been on the uptrend in the Standard & Poor’s 500 Index, this is one of the reasons why analysts believe that the pair will overturn the current trend. Curry indicated in an interview that the dollar/yen pair is moving against expectations and suggested that the market is about to see an overrun. According to strategists at Bank of America, the dollar may appreciate to 84 yen, which would open door to 85 and 88 levels which may be attained by the end of the year. In the banks long term forecast, the dollar may move to 101 to 125 levels in the next two years as the market moves to higher yielding assets.
However, this trend would be limited if the appetite for risk comes back into the market. So far, the dollar has gained against the yen reversing the decline it had experienced at the start of the week. The greenback has gained 0.4 percent against the yen to trade at 80.18 yen. The dollar has advanced 0.7 percent since May 9. Positive sentiment from the US economy and Japanese economy are propelling these two currencies against other major currencies in the world. Risk appetite has declined in the market as Europe struggles with political changes that are taking place in the euro zone.
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