EUR/JPY moved nicely lower into our projected 163.60 zone before bouncing hard into our 2nd offers, and then into our attached stops. All in all, I scratched that trade sequence. I don't mind so much because the technicals performed very well at that 163.60 zone. Wave 1 equaled wave 5 at 163.58, and the 2.618 projection of waves 1 and 2 placed the low of wave 5 also at 163.58. The support zone did its job a bit too well as EUR/JPY reversed the entire 5-wave move down and broke to new highs as did USD/JPY through 116.00. But the big news is USD/JPY breaking the month-long resistance line at around 116.00. Based on the reasoning mentioned in the video, I am short USD/JPY at an average of 116.55 for a small scalp lower. My one concern is the USD strength against Euros as EUR/USD is threatening a trendline break from 9/4/07 at 1.3550. The dollar strength across the board is undeniable, but USD/JPY has a reputation of dancing to the tune of its own drummer.

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Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

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The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.