We have been talking about this big weekly EUR/USD Butterfly resistance at 1.3000 for a few weeks, and more frequently in the last few days.  Our research efforts are beginning to payoff. We were long EUR/USD from 1.2840 last night, which wound up being a pretty tight entry, as price traded up to the 1.2880 New York highs. As I cautioned you, look to to book profits quickly as we are still working off the excess of this large source of weekly resistance. Sure enough, price struggled at these highs and headed lower to stop my position out at breakeven.

With a level as technically significant as the 1.3000, I would bet that the market will require more than these two weeks of the dance around the level before we break through. Realistically, we could go range bound between 1.2550-1.3000 for the rest of the summer. I am about to go back out on a limb and say that we see 1.2600 before 1.3000.

USD/JPY has held in there extremely well, especially with the 80 point rally this afternoon. There was more news in the markets about China's potential effect on global markets should they continue to revalue their currency.  We are looking for 112.45 tonight to be confirmed with the momentum indicator breaking resistance after moving into positive territory.

The 13-minute USD/JPY chart has nice a Butterfly target forming at the .786 retracement of the yesterday's high-to-low. The confluence of Fib levels arrive at tonight's target of 112.45-50. We look to get long USD/JPY at 111.75 and 111.65 with stops below 111.50. Keep in mind that the target serves as the final price provided that the trade went as exactly to plan. As we all know in the financial markets this seldom happens, so be sure to implement proper risk reward if there are market developments while the trade is working.

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

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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.