A consolidation triangle is forming above the all-important 1.2620-40 zone. If the triangle breaks to the south, sellers are going to give this 1.2600 area a good run.

We're going to layout three possible EUR/USD entry scenarios for tonight. First, If EUR/USD rallies back above 1.2700 between now and the Asian open, look to get short a half EUR/USD position just below the 50% retracement at 1.2698, and the second half just below the .618 retracement at 1.2708. Stops for the whole boat go above the .786 retracement at 1.2724.

Or, if we head straight south, wait for the 3-day uptrend line, or bottom half of the triangle, to breakdown at 1.2670 to a 1.2655 low, then offer 1.2675 to get short on the retest with 25 point stops above the figure.

Or, if you're still short from 1.2725 after the FOMC fill, hold onto them and trail your stop lower as the levels described above are broken.

In any of the 3 scenarios, as I mentioned yesterday, getting through the 1.2600 level in EUR/USD will likely take repeated efforts. So be a player and book profits on partials as we approach the 1.2620 support level. Then, offer them back out to re-short at higher prices with slightly larger stops, because you've built equity in the trade. Remember, being nimble is the key in here.

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

Disclaimer
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.