A heavy EUR/JPY had much to do with USD/JPY's choppy upside price action today, while EUR/USD traded quite fluidly to the downside. I received a ton of email about USD/JPY's run to a 110.58 high asking if this qualified as the move to 110.60/70 zone. To be honest, I'm not really sure. It's pretty darn close so the plan is to be long only a half of a position below 110.40 coming into the Asian open to be looking to add the other half after a confirmed break above 110.65.

EUR/JPY is hanging on by a thread above 140.90 and should it give way, 139.60 is the next significant support level. If it does give way, watch your USD/JPY long trade very closely as a move above 110.65 will be very difficult. While all of this is happening, watch for continued dollar strength as EUR/USD melts towards 1.2700. I struggled to find a decent EUR/USD short setup to be on board the 1.2700 move, but couldn't find anything worth posting. But, if you do get triggered short EUR/JPY while you are long USD/JPY, don't panic as you will be synthetically short EUR/USD.

The play for EUR/JPY will be to wait for an initial move down to 140.75 to then offer into the 140.95 retest. Stops should be over 140.35 and look to target downtown, way downtown, for a move to 139.50.

Don't be afraid to trade your USD/JPY a bit here as I'm watching it push towards daily highs. It's very early in the session and there could be some wiggle room so booking profits into the NY highs looking to reestablish lower is not a bad idea.

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

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