You're probably going to cringe when I tell you this, but we're looking to re-short EUR/JPY after taking a tough stop last night. Just keep in mind that the market is not out of get us, or that we were stopped out last night, or that we even exist.  As long as our methodologies are valid, which they are, there's no reason to pass on a good trade setup just because we got a little smacked around last night. Every trade setup is not going to work, which is exactly why we use stops, and last night is a perfect example.

Anyway, EUR/JPY is bumping up against a even longer former channel support-turned-resistance than we were looking at yesterday. Measured move AB=CD points to the .786 retracement at 146.90 zone against the now resistant trend channel.

A closer look on the 2-hour chart shows our sell zone of 146.80-147.00. Stops can be as tight as 147.15 or as loose as 147.50, because our ultimate target is this week's lows of 145.00.

You might still be short EUR/USD from 1.2690-95, as the market currently trades 1.2705. We are looking for EUR/JPY to push 40 points higher into 147.00 to short, which could drag EUR/USD higher with it. EUR/USD is showing a solid resistance level at 1.2740, which is well above your stop levels. If you are able to, you might want to close your EUR/USD short for 10-15 point loss and look to fully participate in the EUR/JPY short trade. Or, if you would like to keep EUR/USD and move your stop above 1.2745, skip the EUR/JPY trade, or just trade a very small position.

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.