We have two possible levels that could contain the highly anticipated EUR/USD pullback, if and when it arrives. According to my preferred count, we saw the stop of Wave 3 at 1.3367 this Sunday night and should be watching Wave 4 chop lower into one of our 2 support zones. The support zones are derived from the 135 point distance of Wave 2. Wave 4 length could very easily equal Wave 2, which places us at 1.3230. Or, if euro is going to push a certain percentage distance through Wave 2 length ( say 61.8% past Wave 2 length), we should arrive at 1.3143. In any case, we can be sure the trip down to either level will be far from a straight drop. Wave 2 was a fairly straight-forward correction, which means the current Wave 4 will likely be exactly the opposite -- full of twists and turns.

In fact, I'm looking at buying a little EUR/USD at the .618 retracement on this 15-minute chart for a move up in Wave X before we see 3 more waves wind their way lower towards our targets. Stops below 1.3250 and be sure to aggressively book profits on the move to 1.3340.

USD/JPY is a bit less clear, but our preferred C-Wave termination is derived from a pair of Fib levels (calculated on the chart) bringing us down to 113.30 area. But again, this road home will be filled with many twists and turns. C-Waves can often have the same complex formations as 4th Waves, such as EUR/USD currently.

The 15 min chart is showing 5 wave sequence consisting of 3-wave subdivisions indicating correction status. I played USD/JPY long from 114.60 late last night based on the same premise. If we are going to get another 3-wave push down at the end of Wave 4, price should move up to 115.30 area and head lower beginning Wave 5. Look to get short against 115.30 with stops not larger than 25 points targeting last night's 114.43 low. Back tonight with an update.

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.