I find it useful to look at the big picture from time to time. In technical analysis terms that usually means inspection of weekly and/or monthly charts. However, I rarely get to see analysis of "ultra-high" timeframe charts, so I decided to make few attempts of my own. Last week I analysed long term charts of the Euro. Here's the link in case you missed it: https://www.dukascopy.com/fxcomm/fx-article-contest/?A-Long-Term-Technical-Look&action=read&id=2626.

Today, I'll have a look at yearly and quarterly Yen charts. Both are covering the period from 1971 to 2015. Since platform's historical data for this pair is currently available from 1986 only, I had to fill in the missing data manually. I've drawn the candles using "Short Line" chart objects.

Yearly chart:


Quarterly chart:


Following the end of the Bretton Woods System (1971), during which the value of yen was fixed at 360 per dollar, the pair embarked on a long term downtrend which lasted until 1995 (although one might argue that it still lasts). After that, the pair entered a wedge-like sideways consolidation but it did broke below 1995 low in the 2011-2012 period. The low was set near 75 and the pair turned back up from there.

The top of the consolidation is the trendline that connects highs of years 1990 and 1998 and also nicely matches 1978 low. This trendline is the most important characteristics of the charts and I see it as a potential point of change of the long term trend. I think a convincing break above the trendline will be required if the pair wants to enter long term uptrend.

2007 high (124) is the last significant swing high and is another level that the pair will need to hold above to make long term bulls happy.

"Fibonacci Retracements" tool, used on 1982 (or 1985, pre Plaza Accord) high and 2011 low, provides some decent retracement objectives: 23.6% coincides with 2007 high and currently also with the above mentioned trendline, 38.2% is found near 1998 high and 150 level, 50.0% matches 1978 low and 175 level while 61.8% hosts 1980 low and 200 level.

Huge upside potential that becomes apparent, when one looks at these long term charts, is definitely contributing to the bullish orderflow that we have been seeing during the last couple of years and the relentless resilience of the pair following every risk-off period. Who wouldn't want to catch a 5000 pip move?
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