We were stopped on a light EUR/USD position for about 20 points last night. I felt myself concentrating in on the shorter time frames a bit too much this week without enough regard for the longer time frame charts. So let's take a the big step back, look at the dailies, and formulate our dollar direction, and our focus levels in two pairs.

An irrefutable EUR/USD fact is that the daily uptrend line is broken. And a broken trendline usually means a trend change is coming, and considering we are working off a failure of the weekly .618 retracement of the 1.3667 high to the 1.1639 low, it's not an unreasonable proposition to expect a run towards 1.2400. But for next week we are focusing on the daily .618 retracement at 1.2643, as well as the significant 1.2620 level. Should these levels give way, we should expect a quick and sudden drop to the .786 retracement of 1.2562. And If that gives way, forgetaboutit, because 1.2460 low is in the sites.

Next is our old buddy USD/CHF. This is actually a rather interesting chart that has recently come into play again. Swissy leg C-D is fighting symmetrical resistance originating from leg A-B. Both legs traveled approximately 680 pips before reversing at least 400 pips, July of this year being last. Well we are back at the symmetrical resistance level, which coincidentally happens to be at round number 1.2600, and like EUR/USD, if this level gives way, .618 retracement at 1.2735 is just around the corner.

So, for next week our dollar direction is higher and our EUR/USD focus levels is the 1.2620 break brings 1.2560. We're looking to Swissy for a figure break for the big push up to 1.2735. What do we notice here? Well to be long dollars you're getting a lot more bang for the buck to be short Swiss rather than short euro. The USD/CHF target is 130 points away, whereas EUR/USD target is only 80 points away. So if we're expecting Swiss to weaken 60% more than Euros against the Dollar, we would expect EUR/CHF to strengthen. Taking a quick look that chart tells us we might be onto something.

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

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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.