EUR/JPY broke though our 150.06 resistance and is flopping around in a 25-point range since London came in for the morning. Fib analysis, like we did yesterday, doesn't need to completely reverse the market trend, only offer a window to play a short term correction.

There has been a significant divergence in the last few sessions between EUR/USD and GBP/USD. GBP/USD has broken through the highs from last week into 1.9060 resistance, where as EUR/USD is well below the highs of a week ago. This could be a result of EUR/GBP weakness, which by the way we are still watching the 0.6725 break to get short, or it could simply be that Sterling is the preferred dollar pair in this quiet market environment. I keep hearing traders talking about picking the EUR/GBP bottom, which makes me want to focus in on selling it even more.

1.9060 is showing a Gartley sell pattern from the pair of 227 point measured legs at .786 retracement level. However, this might be one of the times to fade this pattern and expect the break through. We're not looking to get long Sterling against the dollar, but against euro. So we're going to keep the EUR/GBP short trade on the radar screen going into Friday's Non-Farm Payroll.

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

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