EUR/USD continues to trade within the confinements of the orange, descending triangle, which we suspect is Wave IV. The trading conditions within consolidation patterns, especially fourth waves, after long, extended trends like we saw in April-May tend to be brutal in that they test the outer extremes of the pattern boundaries. And if you cheat a bit while defining those boundaries, range-bound markets will usually catch you with your hand in the cookie jar and find your stop.  We cut the corner a bit yesterday while defining the lower boundary of the daily uptrend channel support and our stop was found. We adjusted the longer-term technicals to fit our short-term trade plan. It should be the other way around. The proper trade setup is to define the longer-term technical levels and then adjust your short-term trade scenario to fit them.

The proper EUR/USD trend channel is shown on the daily chart directly below with the inset chart showing a close up of price testing the 1.2720. It was a near perfect test of channel support before a 100 point move higher. You can compare this channel to the one drawn on the second daily chart below. As you can tell, it's so important for your short-term trading that your big-picture technicals are exact.

So, some of you are still in the trade and some are not. If you are still long, this would be the time to eliminate risk and trail your stops to entry price. Again, we are range bound within the triangle and whippy price action is still very likely. Your target is the upper end of the triangle at 1.2880.

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.