We got knocked out of our short position at 1.2725 on last night's London open for a small 25 point loss. All in all yesterday was a breakeven day for us. EUR/USD is getting ugly in this 1.2650-1.2750 range, and although we have remained nimble, it might be wise to steer clear for a while until the range is resolved.

USD/JPY is showing a tight trendline, .618 ret support zone at 116.50. I doubt this will completely reverse the 2-week USD downtrend, but it should be at least good for a tradable bounce.

Drilling down to the hourly chart, we see measured move AB=CD pointing to that .618 ret, trendline support in the 116.50 zone. Let's look to buy half at 116.50, the second half at 116.25, and leave a stop for the whole position at 116.10. On the average, you will have about 30 points of risk, so you're minimum target should be a re-test of the 117.00 level on this trade.

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

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