Just back from the Dubai Forex Expo this morning with a wicked case of jet lag. Dubai is an amazing city that has quickly become the finance hub of the Middle East. I had the pleasure of meeting so many readers in person.

I kept one eye on this extremely volatile shift into risk averse positions while away, that began with the global equity meltdown on Tuesday. The resulting moves in the currency markets seem to be concentrated in yen as the carry trade is being unwound. Aussie, Euro, Kiwi, and Sterling are all being heavily sold in the favor of the yen. The moves are in such a late stage of this initial push lower, along with being away from the markets for so long, to chase this freight train any lower is most definitely a bad idea.

The dollar has fared surprisingly well against everything except Yen, which indicates a Yen-specific move. Selling in both EUR/JPY and USD/JPY has dragged EUR/USD down into short term technical support. If and when the carry trade selling abates, this should let EUR/USD come up for air giving us a tradable bounce for before new lows through 1.3080 are made.

For tonight, I am bidding 1.3122 and 1.3112 with 1.3095 stops for a move into 1.3150 on a partial. Be aggressive with your stop management after booking profits on the first, as we're stopping to pick up pennies tonight with an avalanche quickly approaching from above.



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.