You Only See This Chart Once Every Few Decades

Continued US Dollar strength has brought its relationship with the Japanese Yen to a critical resistance point. And what happens from here on out will likely bear importance across the globe.

In short, I am watching the USD/JPY currency pair for either a breakout (continued strength in the US Dollar relative to the Yen) or a breakdown (weakness in the US Dollar to the Yen).

The latest rounds of global Central Bank easing have brought currency wars back to the fore. Powerful relationships like the USD/JPY have a direct impact on domestic and global economies, as well as commodities and equities (especially when at critical junctures).

If the US Dollar breaks out versus the Yen, it will likely coincide with (or lead to) a US Dollar Index breakout. And this could continue to pressure commodities.

In the chart below, you can see that the US Dollar vs Yen is very overbought. In fact, its monthly momentum is the most overbought in the past 45 years. But, at the same time, the USD/JPY is bumping up against multi-year triple resistance. Investors: put this one on your radar!