The last 24 hours have been nothing short of exciting in the global financial markets. The dollar was generally weaker today on the heels of plunging US bond yields, gold threatening an uptrend continuation, and from a rather dramatic DJIA reversal on the approach of all-time highs. The bond market was the leading story, however, as the spectacular run-up in bond prices is signaling trader’s beliefs that a soft landing scenario for our economy is not the likely result, and the first rate cut is possibly only months away. This does not bode well for the dollar.

Last night's trade was to be a scale-down buyer in USD/JPY for a 116.37 average. The market is consolidating below the 116.50 resistance and does not look to have the juice to punch through. Take your 10 points on the trade and go home flat on the weekend.

For next week we are going to focus on USD/JPY's uptrend break. More specifically, move A-B projected down from C points to symmetry through the trendline break at 114.40. RSI has also broken its uptrend support signaling that lower dollars could be the theme for next week.

EUR/USD is getting extremely tight within this pennant consolidating pattern. As I've been harping on all week, being quick on the keyboard is the theme while we are contained in such tight ranges. When do break, however, buckle up, because it's gong to quite a ride.

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.