EUR/USD finally broke down through the 1.2985 low that we have been watching for so long to a 1.2930 low print this morning. USD/JPY held below the 120.00 level, with help from a heavy EUR/JPY, which broke down through our 155.00 to a 154.59 low. I 'm afraid that EUR/JPY broke down just as I was publishing the report last night, so you most likely missed the trade entry. Sterling has held up remarkably well as compared to its EUR/USD 1.2985 equivalent low set back on January 7 low of 1.9260.

The next technically significant level that well help us to determine if this dollar strength is merely a retracement in the course of the longer-term downtrend, or something more, is EUR/USD 1.2900. I have done the ratio analysis on the three most recent price legs and they all suggest 1.2900 could halt the decline for now.

USD/CHF is showing a similar technically significant level just above us at 1.2500. Projecting the end of the current move up from 1.2106, as compared to the previous 392 point advance, we find ourselves right into channel resistance at 1.2500. Looking at the EURCHF cross, the trend is obviously up, so it's wise to favor EUR/USD longs rather than USD/CHF shorts. But as busy as EUR/USD could be around 1.2900, a smaller USD/CHF position is not a half bad idea. Keep in mind this is daily chart analysis, and trading daily charts require stops much larger than 50 points, which you know is not our style here. So, I am not going to give specific trade recommendations in here just yet, but I will be looking to get scalp Dollars short against both Euros and Swiss before establishing a longer-term position.

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.