We have seen a stronger dollar in a fairly volatile trading session on this last Friday in August . The only clean trend on the charts that I see is dollar strength against the yen, but of course EUR/JPY is still knocking on the 150 door. EUR/USD pulled back to our 1.2720 target from Thursday before rocketing 50 points higher.

CPI data out of Japan came out well below expectations, which sent the pair through 116.80 resistance. Then, just as the upper daily trendline resistance shown below was being tested, the BOJ commented that they are in favor an October rate hike which sent the pair sharply lower. Coincidence?

A weekly bar close above 117.25 would get the longer term models interested for continuation higher in coming session, but 116.75 is the make or break level for today's session. Provided we do finish up today above 116.75, the 1.0 projected move of AB=CD points to a retest of the 118.00 July highs.

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

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