Let's take a bit of step back to get a top level view of what we're trying to accomplish in here. Two of our usual suspects, USD/JPY and EUR/JPY, have broken daily trendline support paving the way to lower prices, of course with help from Dow 11,800, as disgust this morning. USD/JPY is back in contact with former trendline support now turned resistance, while EUR/JPY is still well below similar trendline resistance. My regular readers know we like to trade at extremes of support and resistance, as to minimize the size of our stop losses. So USD/JPY is our ticket for now.

The daily trendline resistance comes in at around 117.00. When using such long term technical levels, a margin for error must be allowed when looking at the short-term charts. Just inside 117.00 are 3 Elliott Wave and Fib targets that call for price to remain south of 117 the figure. Right now, I am short a third at 116.78, offering another third at 116.88, and the last at 116.98. Stops for the 3 are 117.15 and will be looking to buy a piece back at the 116.20 New York lows. I will definitely be looking to keep my last third for our 114.65 lows. I stopped out at breakeven on the EUR/JPY trade idea today.





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.