We took a small 25 point stop last night on our short USD/JPY, which was only 20 points from the highs, and 140 points from this morning's lows. Boy, I would've liked to have that one.

I want to take a step back and look at some very long-term charts to ensure we are not getting caught up in the emotion of this move and remain objective about our analysis. Before we cancel our European vacations, I have outlined a target level on EUR/USD, USD/JPY, GBP/USD, and USD/CHF monthly charts.

EUR/USD monthly is showing simple trendline resistance originating all the way back to Clinton's first term. The level where price will likely collide with this trendline is approximately 1.3500. USD/JPY is showing similar USD support from trendline support from the same year as EUR/USD in the vicinity of 107.00. Obviously the EUR/USD level will more likely come into play before the USD/JPY level does.

GBP/USD is showing 2.010 resistance originating back from 1991 as is USD/CHF at 1.1110 from 1994. The reason I'm showing you these charts is to illustrate that the US dollar has yet to really breakdown, far from it. These charts actually show a rather range bound dollar on the whole in the last 10 years. So the point is to not get caught up with the emotional media and be blind sided by a sudden dollar reversal, which is really nothing more than a return to the 10-year range trade.

We are also watching USD/JPY above 115.30 on the close tonight. A push back above 115.30 would be a strong weekly candle close, which is kind of similar to August action that sent USD/JPY 600 points higher to the October high. Anybody notice that daily S2 and  weekly S1 caught the USD/JPY lows today? Back Sunday night with a new game plan.

Daily and Weekly Pivot Points

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

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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.