We have vindication from our missed USDJPY trades! We maintained our discipline and stalked a EUR/USD short entry that never went more than 5 points against us before for a 75-point winner. The dollar came in well bid for the London morning as EUR/USD opened at 1.2903 and traded to a 1.2796 low into the London lunch time. We look for continued dollar strength into New York as both USD/JPY and EUR/USD are finding some combination of US dollar support at the .618 levels on the daily and weekly charts.

USD/JPY has a very similar alignment of Fib support levels on the longer-term charts as compared to EUR/USD.  Forty-period momentum has pulled back to the zero line setting, indicating that price is only about 80 pips better than it was 40 days ago.

An hourly trend channel shows signs of being broken after the bounce from daily Fib support. Should 110.70 trade, a pullback to 110.40 area sets up to a 111.50 test.

The 13-minute chart will be our traded time frame and a minor downtrend line shown in blue will be the trigger. Wait for a 110.60-70 area to trade before placing your buy limits at the 110.40 to be long against a retracement to that hourly downtrend channel now serving as support. Stops should be below the figure and targets are uptown at 111.50. See you again on the Asia open.

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.