Evidence of a dollar recovery is more than overwhelming with this morning's action, which originated from a 150-point buying spree of USD/JPY into last night's New York close. Our trade idea for the Asian session was to buy a USD/JPY pullback to the 111.75 area. The very minute that I was able to publish the my report the price pulled back to 111.75 and then within another two minutes price was already at our 112.40 target!  So much for that idea.

Our EUR/USD weekly Fib resistance pattern continues to do its thing by making life above 1.2900 miserable for EUR/USD longs. We are now testing the April-May uptrend channel support, which is a critical juncture for the higher EUR/USD outlook. A daily close below 1.2730 zone is bad news for the euro bulls and the next likely spot will be September 2005 highs of 1.2589.

The hourly tells us that EUR/USD sellers are going to have their work cut out for them if they want a look at 1.2730-00 tonight in Asia and Europe. The massive daily uptrend channel is shown as the thicker, dashed line which is joined by a pair of Fib support levels, and a minor downtrend line now serving as support. I scalped EUR/USD long from 1.2740 based on this chart and am currently scaling out of that position. But we will continue to look for solid technical setups to get long dollars based on the daily and weekly charts. That EUR/USD uptrend channel will likely be a battle, but if it breaks, look out and get ready to see some scrambling. You could use a push below 112.60 in New York to get long a half position of USD/JPY to carry into the Asian Session with stops below 112.40.

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.