It's been a busy morning with EUR/JPY and USD/JPY. We are now flat USD/JPY with extremely varied trade results. You could have booked as much as 130 points profit or scratched the trade. USD/JPY sold down to within 10 points of our 115.45 target last night, before rocketing 200+ points higher in a flurry of yen selling. The 115.55 low became a truncated 5th wave. The strength in the carry trades looks to continue for some time, especially with the recent equity market strength.

Our 114.65 W.5 target will have to be put on hold for the mean time, because we have two new focus levels above us to concentrate on. We are now in wave 4 on the 240-min chart shown below. And according to Elliott, the guideline of alternation suggests a simple wave 2 (such as we had between 2/16-2/22) is followed by a very complex wave 4.

Thus far, we have completed wave a, b, and appear to be in wave c, which could find trend channel resistance at 118.05-23. We could expect price to fail here in wave x , retest 117.50 area, and then rocket higher in 3 more corrective waves to the max W.4 target of 118.97. Obviously we are looking pretty far into the future here, so for now, we're going to break it down and take it wave by wave.

I shorted EUR/JPY into the 2-hour chart, 336 point symmetrical retracement just above 154.00. I am out of most of it with stops at breakeven. For tonight, I will be looking to be flat and EUR/JPY and setup USD/JPY longs into a test of 117.00.

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.