The market has found a nice short-term spot to sit down and catch a breather before the next leg of economic data. The rest will be short-lived, however, as the docket is loaded this morning and dollar traders will have plenty of data to help decipher the future of the dollar's slide.

In my humble opinion, EUR/USD longs better look for continuation that is both swift and soon, as we currently trade just underneath some beefy, multi-year resistance levels. The inset weekly chart shows the two studies we have been watching for days now, .382 Ret and weekly downtrend resistance line, and the larger 6-hour chart shows a huge RSI divergence against the upward parallel trend channel. So in all, I count four sources of resistance. As I mentioned, EUR/USD better get a move on or the longs will start to jump ship.

Watch for a 13-minute channel breakdown at around 1.2390, which will bring 1.2360 and 1.2325 into play. Wait for a clean break of the channel support first, say a trade down to 1.2380, before offering into the 1.2400-10 area. Aggressively cover your shorts into the 1.2325 level as fresh longs will likely be stepping into the pit for an anticipated third ride up to 1.2425.

If price does hold 1.2400 and heads back towards the pinnacle 1.2430, keep in mind that there is relatively little wood to chop between there and 1.0 Daily Wave C projection at 1.2510.

This was a nice setup on the 30-minute Swissy to play the channel break into a Gartley, but unfortunately it has already played out.

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

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