You should have just been triggered short in USD/JPY for a 118.05 average price. EUR/JPY made a hard push through 150.25 resistance pulling USD/JPY through the New York highs.

When deciding how large to size your positions, look to the longer-term charts to gauge relative strength or weakness. Consider the side-by-side USD/JPY and USD/CHF charts below. You can easily see that USD/CHF is much weaker than USD/JPY relative to their proximity to the Feb 2006 highs. USD/JPY is only two big figures below the February highs, where as USD/CHF is almost nine big figures below the February high. So when you have two trading ideas, favor the relatively weaker pair when looking to be short, and the relatively stronger pair when long. In this case, we are looking to be short both, so favor a heavier position on the USD/CHF idea.

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.