EUR/USD traded in an insignificant 30-point range last night, USD/CHF saw 35 points, and USD/JPY went about 40 points from high to low. The only real mover in last night's quite market was GBP/USD that continues to benefit from a weak EUR/GBP, which made a new 15-month low.

Although EUR/JPY has been a sloppy trade above 148.50, the lows prints have continued to respect trendline support originating from the June lows. Please note the chart below only shows the trendline back as far as July.

And as usual, trendline support alone is never enough to formulate a trade plan. We need Fib relationships of neighboring price legs before we put our money to work. The previous price leg originating on October 8 down to the October 17 low totaled 177 points. Now, If you take that distance and project it down from the October 26 high, youââ,¬Ëœll get a 148.95 target. Next, the .786 retracement of the October 17 low to that same October 26 high works out to be 148.97. So we have 148.95 and 148.97 being significant in terms of Fibonacci relationships. Now we can slap that 4-month trendline on top of price and we arrive at a decent buy zone of 148.95-149.05 with stops not closer than 25 points away.

Our USD/CHF trade idea remains open as well.

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.