The Japanese yen continues to be heavily accumulated as EUR/JPY and USD/JPY saw nothing more than a 30-point bounce from consolidation at our technical support levels of 141.85 and 114.60, respectively. EUR/USD is currently in its fourth attempt to clear daily resistance levels at 1.2430 and from what we can see in the early New York opening, it's being met with heavy resistance.

This is not surprising as the final two-year downtrend resistance level and .382 retracement from the 1.3669 high to 1.1647 low fall in at exactly this level. However, should these levels give way, which I believe will eventually happen, it should be clear sailing towards the 1.0 projected Wave C correction at 1.2511.

A closer look at the current daily correction pattern we are in shows a 5-wave move up to point (A), followed by a 3-wave correction to point (B), followed again by a 5-wave projected correction to point (C). According to Elliott Wave theory, this is a 5-3-5 Zigzag correction where legs A and C should be equal. This will put price just north of 1.2500 after the breakout from current levels of 1.2425.

For the intraday play, let's continue to stick with the hourly trend and be on the bid after a pullback to 1.2425 with stops below 1.2395 for a ride up to 1.2475 on partials and hopefully the full target of 1.2500 on any remaining position.

Keep an eye on USD/CHF at the 1.2650 level, which has held as remarkable support, while USD/JPY and EUR/USD are on the move. Without USD/CHF participation below 1.2650, EUR/USD will have a difficult time holding the 1.2425 level.

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.