We got short EUR/JPY at the high price for the second night in a row. Your max potential gain in the trade was just over 100 points, with only 20 points of initial risk. Personally, I bought back half the position in the 157.60 area when the New York lows were tested and held, pulled my stop to breakeven, and then put in a take profit for the remaining half position at the weekly pivot point of 157.15. I didn't scoop the lows, but it was good enough for me, particularly in this market.

To say this market had narcotics for breakfast would probably be an understatement. What will be interesting to me, with this morning's sharp move higher in EUR/USD after a much stronger than expected US GDP, is to see if the rest of the trading world jumps on board and starts shouting, “EUR/USD uptrend!” I have a sneaking suspicion this will be case. But, being that we are cold, hard, technical assassins, we remain objectively ahead of the crowd searching for clues to tell us they are letting their emotions get the best of them.

Looking at the EUR/USD charts, we find a nice collision of price symmetry and channel resistance about 50 points above us at 1.3055. What a surprise that would be to EUR/USD longs if they buy the breakout above the 1.3044 B-wave highs, and run smack dab into 1.3055 resistance.



Moving down to the 30-minute chart, there is indisputable evidence that a minor 5-wave impulse move began unfolding this morning. I have us in the middle of wave 4 pointing to a minimum target of 1.3028 to complete wave 5, and more likely to our 1.3055 target. I am considering getting long a half position into a test of 1.2982, as shown, for the move into those two targets. The real sweetheart of a setup will come from dovish Fed commentary at 2:15 p.m. EST that sends EUR/USD into our 1.3055 zone, and then catches everyone on the wrong side of the market, for a dump into the close. Ideally, we can scoop a light EUR/USD long position at 1.2980-85 ,and sell double our position at 1.3055 to be net short.

But before we get too carried away here, a disclaimer. When you slice the market up like we have in the past two days, your confidence can grow a little more than it should. I need to recognize this and admit that I could be trading with more ego than logic. So if you have been standing on the sidelines for the past two days not involved in our trades, FOMC is not the time to jump into the ring with full positions. The market has already shown us this morning that it's wild, and a Fed that catches the market off guard will certainly not do anything to calm volatility. All trade ideas mentioned here are accompanied by maximum 30-point stop losses.



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.