Below looks at the Japanese yen over the past 20 years.
For the majority of the time, the yen has been inside of rising channel (A). Now, after breaking support, a big test is in play.
The yen remained inside rising channel (A) from the mid 1990s until 2014, when it broke below rising support. The rally that has taken place since the lows in 2015 now has the yen trying to climb back into this long-term rising channel.
At this point, the yen is facing a triple resistance test at (1). Some think that what it does will have a big impact on the risk-on trade in global stocks.
Right now, yen sentiment shows that 70% of traders are bullish.
This is one of the most important price points in years for the yen and what it does at (1) could impact stocks around the world. Even if you don’t trade currencies -- the yen or FXY -- what happens here could have a big impact on portfolio construction going forward.