I'm adding USD/JPY to radar screen for tonight. I've been watching this USD/JPY channel break on the daily for some time now waiting for an entry. When you zoom down to a smaller time frame, you can see that price is climbing up the side of the now resistant channel, but on the underside. See a sloping trendline can be support or resistance, but because of its angled nature there is no fixed price where exactly it will be support or resistance. So how do you know? Add horizontal support or resistance, such as Fib, to find what price the angled support-resistance will respect. We seem to be consolidating below the .618 retracement along the resistance trend channel on the daily chart. 
 

 
Dropping down to the 30 minute, we find 1.618 Fib projection fortifying the daily .618 and channel resistance at 115.75 zone. Notice how well price respected the 1.0 Fib projection at Point D on the way up. You would expect the same from 1.1618 at Point E.

Look to be short USD/JPY anywhere above 115.75 with stops just above round number 116.00. If you also plan to be long EUR/USD around 1.2700 from this morning's trade idea, keep in mind that both trades will make you short dollars. So position size according to how much long-dollar exposure you would like tonight. Personally, considering Non-Farm Payrolls is 36 hours away and that strong ADP report this morning, I'm looking to trade half a position on each trade idea. 
 

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

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