The EUR/USD 1.2873 high…I'm so torn about calling that a successful test of our two, 5-wave projected highs, especially because we traded 40 points lower at the New York close. Something tells me they are going to sell this down to the 1.2800 figure before a ramp job higher to test stops above 1.2900 in Eurozone and London. However, the problem lies in EUR/USD's lack of support below 1.2810 all the way down to 1.2750, which provides no solid technical entry or stop level. A 60-point zone with no foreseeable stop level is a little big from my britches. So let's look to play continued USD weakness elsewhere where it does offer a solid technical setup.

USD/JPY faces a 7-day trendline resistance level above 111.00, as illustrated on the inset hourly chart. Just below the figure, a nice little Gartley is in forming, offering short entries at 110.90 and 111.00 with stops above the trendline resistance at 111.15. Look to take partials and trail a stop to even at the .618 Ret of the 110.08 low to whatever the high ends up being. If tonight's high is 111.00 for example, your initial limit would be placed at 110.42. Or you could scale out of USD/JPY shorts if EUR/USD just happens to be dealing 1.2900 at that time.

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

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