USD/JPY is back above 119.00 after a strong showing in overnight trading, so the 117.50-75 long trade idea has been canceled. EUR/USD is quickly reapproaching the 1.2500 area lows after last night's spectacular trendline failure at 1.2650. My preferred wave count is a minor uptrend support break at 1.2520, which then brings wave 5 of 3 down to a 1.2415-35 target zone.

But before we breach the 1.2500 area lows, a retest of last night's 1.2575-95 breakdown level would be a nice level to establish new short positions. Stops should be above the figure at 1.2605 as wave 5 of 1 unfolds to a retest of the 1.2480 lows.

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

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