Dollar bearishness is approaching feverish levels. When combined with EUR/USD's failure below 1.3000, thus far, long dollar trades should be heavily considered. We are in the 55th day of progression, as compared to the previous 51-day advance of A-B and are struggling with a pair of .618 Fib resistance levels. A .618 retracement of the move from all-time highs on December 2004 down to November 2005 along with the 1.618 Fib projection from C as compared to A-B are offering significant EUR/USD resistance. The highlighted chart shows bearish candlestick formations against the Fib resistance along with the round number 1.3000 failure. Nine-period momentum is moving lower in the short-term indicating that even though prices continue to climb, they are doing so a slowing pace.

We are looking at a two-part trade tonight. The first is for the nimble and short-term trader that is looking to take a quick 20 points. First, look for a minor break down from current levels of 1.2920 to the 13-minute chart gray uptrend line. This will be the trigger point for trade 2. Wait for a breakdown through this trend support to an approximate 1.2975 low before a move back towards 1.2895. I look to be short in here with stops not closer than 20 points for a move down to last Thursday's lows of 1.2820.

Unbelievably, we missed our second consecutive USD/JPY entry by about 8 points on Friday before a nice 100 point move collapse. It is unfortunate. Yes. Does it discourage us? No. Do we chase entries? No. If we continue to exhibit patience and keep the disciplined approach, we will be in trades at prices so tight that only a few traders around the world can claim.

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.