USD/JPY 110.95 offers were so close, yet so far away. USD/JPY traded to an approximate 110.75 high before imploding some 140 points lower to a 109.30 low. As I have mentioned before, so goes the life of a levels trader. We base our trades on heavily researched technical levels and accept nothing but that price. Our discipline entries allow our stops to be small and our profits to be large.

Continuing to play this USD/JPY downtrend channel, we find a pair of Fib levels identifying exactly which part of the channel to play next.  A .618 retracement combined with an AB=CD move into 110.70 pinpoints the next intersection of technical levels. I am currently offering this level with stops above 110.90 for a move back towards 110.00 on partials for a potential carry over the weekend.

EUR/USD met and exceeded the pair of Fifth-Wave targets, but is struggling with .618 retracement of the large 1.3660-1.1640 move at 1.2890. A weekly close below this level would be significant and could have implications of a short-term dollar recovery for next week. However, EUR/JPY is currently trading with an offered tone, which would fuel our USD/JPY short. As I just mentioned, EUR/USD is at resistance, but EUR/JPY is heavy, so there is no problem being short USD/JPY.

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.