(Bloomberg) -- Chart traders are getting excited about a further rally in the once under-pressure yen.
The dollar-yen pair has broken its 2023 uptrend and fallen through a closely-watched technical support zone known as an ichimoku chart, which paves the way for a further decline. The yen has rallied close to 9% against the dollar from its October low, though is still down 17% this year.
“Many people see a lower dollar-yen because of the strong sell signal from the ichimoku chart,” said Yukio Ishizuki, a senior currency strategist at Daiwa Securities Co. in Tokyo.
Traders are closely watching lows this month for the dollar-yen, a breach of which could see the start of a bear trend potentially toward the pair’s 200-day moving average, according to Pepperstone Group Ltd.
“Clients are perfectly split here on short-term direction,” head of research Chris Weston wrote in a note. A closing break below lows seen in November would probably “see momentum accounts look to increase short exposure.”
--With assistance from Daisuke Sakai, Hiroko Komiya and Cormac Mullen.
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