A rather benign PPI reading sent the dollar plunging ahead of tomorrow's critical CPI. We're up about 60 points on our 116.55 USD/JPY short from last night as the market currently trades 115.95. The market doubled bottomed this morning at 115.83, only 17 points from our Fib target, which tells me there might be some 115.75-80 option protection here. So for now, tighten up your stops to 116.35 because we are also hearing of stops in the market below 115.50. And if they get those stops, we could be buying the last piece of this short back around 115.25, or with 130 points of profit.

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

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