EUR/JPY has found a temporary bottom after 5 waves down to the 1.618 Fib Ext of the latest move. Currently, channel resistance is being threatened, which if broken, could setup a short squeeze to 155.00+.

While EUR/JPY is in possible recovery mode and EUR/USD moving higher from our 1.2985 low, our USD/JPY short trade has gone into a possible B-wave triangle consolidation.  We have seen the smaller waves a, b, and c complete within the larger B-wave triangle and could expect d-wave to find support around 118.20 before moving up to the e-wave completion on a lower-low test of 118.60, before failure to a new C-wave low. In other words, if you are still short a piece, keep the stop above 118.80 and try to wait out the consolidation.

I am watching several setups develop, but feel the name of this game is still consolidation so the best move is to sit on our hands in terms of new positions.

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.