We took a 20 point stop in Sterling, but grabbed a piece of the 155.25 EUR/JPY lows last night. Unfortunately, we were only filled on one-third of our position as we trade 80 points higher. It was a wild ride to the upside in USD/JPY and EUR/JPY as Treasury Secretary Paulson made comments regarding an increasing need for Yuan flexibility. Why they would sell yen on this data, I'm not exactly sure, but will check into it later. Whatever the case, the 100-point move higher offered plenty of opportunity to add to your long from 155.29. Personally, I went flat EUR/JPY at 156.12 for 83 points on 1 and 20 points on the other as USD/JPY struggled to get through the 120.55 highs. My final target will be the 116 point symmetrical retracement at 156.41. I am looking to re-establish longs into this current test of 156.00 for the move into 156.40. The late time of day, however, is a source for concern.



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

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