I booked partial profits on the EUR/JPY short, and stopped at cost on the balance, as the yen products, along with US equity markets, staged a full-fledged afternoon recovery. The EUR/JPY count has to be reconsidered as the move down originating from 155.70 is no longer a 5-wave impulse, but an X-wave of the bigger picture, complex B.

USD/JPY impulse down is still intact, provided that 117.20 contains the buyers tonight. Considering the strength of the carry trade, equity short-covering this afternoon in New York, Tokyo is all but certain to try this level. Rather than being a hero tonight, I am going to sit on my hands and watch to see if the carry trades start taking their cues from the Nikkei at 8:00 p.m. ET at 117.20.

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

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