Don't Ignore This Chart!

Short Term Change In Trend In Yen ($XJY)

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The Japanese Yen ($XJY) gapped above resistance and the major down trend that has been in place for years. The real question is if this is a interim low in the Yen or a much more important low.


The last time the RSI got this strong was back in 2013 and that ended up being a whipsaw or false breakout. Moving to price, the giant slide in value for the Yen created a massive downtrend which only created one higher high occurring in 2013. The price gapped up above the red line resistance today. The blue downtrend which has been going on for a year was also broken on the same move. The level of 85 is very important now. A meaningful push above 85 would force a change in a lot of carry trades and would probably force short Yen trades to cover, pushing the Yen higher. A higher Yen is usually bearish for the NIKKEI stock Index. So while we have broken the first level of horizontal resistance and the downtrend, the 85 level would be a new 5 month high for the first time since 2012. Notice the blue line on the MACD. If we get a change in momentum towards the Yen, this is an important parameter in the global market structure.

Good trading,
Greg Schnell, CMT

Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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