USD/JPY and EUR/JPY switched rolls last night as USD/JPY led the two higher stopping us out for a manageable 30 points. We pulled down about 50 points on a partial from the same USD/JPY short following Friday's NFP, so we should be down slightly on this trade series. Notice EUR/JPY has held below the 155.50 level mentioned last night, which appears to be capping any further USD/JPY advances.

Many of the major pairs are at very critical inflection levels in here. EUR/USD is back for a fourth test of the highly important 1.2980 level, USD/JPY blew through every resistance level except for the 119.70 double top, Cable needs to hold 1.9365 for my preferred wave count to remain valid, and lastly USD/CHF has a beautiful Fib zone above us at 1.2500, which perplexes me even further. If USD/JPY wants 120.00 and USD/CHF wants 1.2500, then EUR/USD will certainly break down through 1.2985. Then, if our preferred EUR/USD wave count is to remain valid, price needs to maintain 1.2900 while USD/JPY and USD/CHF are taking care of what they need to care of. That sequence of events is certainly realistic in terms of percentage movement in relation to one another.

As you can see, I am brain dumping a little in here. It's probably because I was up pretty late with the USD/JPY position, so I need to take a step back to clear my head a bit. Usually, if I don't sleep well with positions, it's a pretty good indication that I'm in the wrong position. But the fact remains, the markets were quiet in the beginning of this week from a lack of any meaningful economic data, but that will change starting tomorrow.

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

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