Despite the widespread media attention and emotion running through these markets, I have to tell you trading is so-so at best. Believe it or not, there are patterns in formation that strongly suggest many of the major markets are actually falling out of trend phases, and into consolidation/range phases for the next few sessions. Surprising, I know. You might be saying to yourself, “But Todd, volatility is through the roof in here.” I would agree with you, but I would also tell you that volatility is enormous in here mostly as a result of investor and trader indecision. The indecision is clearly evident as the market is ripping back and forth between support and resistance. Did anyone watch the battle in the DJIA at 11,750, the Jan '00 high I mentioned yesterday? There's definitely some carnage on the side of the road at this level. I am trading in here, but with a quarter to a third of my normal position size.

So anyway, EUR/JPY printed a 157.14 high overnight - a good 66 points shy of our orders to get short- before imploding over 400 pips. So close, yet so far away. I am going to continue to watch this one. Speaking of consolidation, EUR/USD is falling into a nice wave 4 triangle on the daily. I can count waves A, B, and C complete of the 5-wave triangle. The move from the 1.4363 lows is wave a-of D, and we appear to be in the final stages of a wave b-of D. C-of D should complete at the .786 ret of Wave C at 1.4800.



I believe the pullback from 1.4682 completed at 1.4510. I am long a small EUR/USD position from current levels of 1.4560 with stops below 1.4510 for the C-wave move up to 1.4800.



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

Disclaimer
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.