Our resting USD/JPY bids were finally filled after three days during last night's busy Asian session. Price held 115.60 before pushing higher into 116.40 resistance for a max potential gain of 60 points. This trade makes us three for three since November 17, and the average pip gain in my fund trading account is 42 pips per trade. I was actually very surprised to look back at my trade records and see that I only did three trades in the last 12 days, considering how active the market was. It wasn't that we didn't have trade ideas, we had orders out on almost every one of the last 12 days. The difference was we remained patient, stuck to our plan, which got us involved in three trades that were all winners.

Okay, enough patting myself on the back. We missed the 1.3235 and 45 short EUR/USD entry last night as the market made a 1.3218 high before collapsing. Then, I actually really dropped the ball on the trend channel retest at 1.3175 labeled as “missed entry.” That short entry was a layup. Now the market is consolidating above daily S1 at 1.3143 and is looking poised to breakdown in a 3-wave correction to test daily S2 at 1.3086, which is also the low of wave 4. According to Elliott Wave Theory, the correction following a 5-wave move up will find support around the pervious wave 4 low.  It's tempting to jump in short here, but we must remain patience and wait for the next setup to come to us.

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.