The markets have seen a few low volume moves with minimal volatility, mostly attributable to the US holiday, but the plethora of international tensions continue to surround the markets. North Korea's underground nuclear test has generally effected the markets to a lesser degree than one would think, but let's reserve judgment until the volume returns tonight.

As suggested last night, the Dollar is at technical resistance as evidenced through a lower USD/JPY, but more likely attributable to EUR/JPY's 150.20 failure. This EUR/JPY failure is most notably weighing on EURUSD's recovery back above 1.2600 in this short-term weak dollar environment. With an offered dollar and a heavy EUR/JPY, the play is to be short USD/JPY rather than long EUR/USD.

USD/JPY is at channel and 1.272 Fib extension resistance in the vicinity of 119.20. 1.272 Fib extension is the inverse of the square of .618 retracement. The other Fib extension levels we use are 1.618, 2.00, and 2.618. RSI has also wandered into oversold waters indicating that buyers might have run out of steam. I played a USD/JPY short position this morning at 119.16 on the retracement from last night's 119.30 failure. I'm out of two-thirds of the position on the 116.00 test, but will be looking to re-establish the full position on a break of the inset chart's minor uptrend line. The trade will most likely be short on a 118.95 break with stops over 119.20 targeting 118.50.