We're 4-for-4 this week and just missed going 5-for-5 last night. USD/JPY traded to within about 3 points of our 115.45 short entry before collapsing 75 points. EUR/JPY, however, did not slip through our fingers. We were 148.58 short sellers on a half position as the market traded just 2 points above our short entries. The market moved lower in a hurry before finally finding trendline support 126 points lower. Truth be told, we were only short a half position, so it's likely you booked profits at our first profit objective of 148.30. Regardless, we had the yen products cornered last night.

There were some interesting developments last night as a thwarted terrorist attack in London briefly ruffled the market's feathers. When traders felt the threat was largely contained, the dollar buying began. Adding to the EUR/USD and GBP/USD selling was a rumor that US Q2 GDP will be revised higher.

EUR/USD put in a clean fracture of the 4-hour uptrend channel support from last night's action. So sell euro's if you got 'em? Not so fast.

There is a much larger source of trendline support than then invalidated 4-hour channel. The daily downtrend resistance has been broken and was just tested as support on this meltdown to the 1.2750 area low. 38.2% retracement also comes in to lend a hand just below at 1.2737. So we need to watch price action develop around this critical area before putting together the next trade idea.

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.