Our EUR/JPY short was looking hairy there for a while, but with a little help from the People's Bank of China, EUR/JPY collapsed in London trading down to our initial 148.25 trendline support target. You should be out of most of your position with approximately 40 pips in your back pocket and stops at breakeven.

Hopefully the volatility will continue into next week. US fixed income was extremely strong this week, and conversely interest rates extremely weak, suggesting the Fed is most likely done. Oddly, EUR/USD did not echo bond trader's sentiments as we trade well below the 1.2900 resistance. With that being said, if the EUR/JPY short we just laid down is the beginning of a genuine reversal, EUR/USD through 1.2900-1.3000 will be a much trickier trade than USD/JPY down through 114.00. So for next week, we're likely to re-focus in on playing the yen products lower.

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

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