EUR/JPY is consolidating around 156.30. The BOJ is scheduled to make their interest rate announcement tonight, which is widely expected to be unchanged. Perhaps the recent rebound in the carry trades is in anticipation of this for tonight, and profit taking longs will enter the market when the BOJ is unchanged. So I would prefer stops to be at cost, or even slightly above your cost.

Further, USD/JPY is showing signs that 5-wave fifth could be starting from current levels of 117.50. W.4 unfolded in a 5-wave contracting triangle pointing to a test of 116.25. Shorts can be established between 117.65 and 117.85 with stops just over 118.00.

Along the story of a lower dollar is EUR/USD looking at wave v of 3 targeting 1.3375, provided 1.3275 holds, as we currently trade 1.3300. Longs can be established between 1.3305-1.3285 with stops below 1.3270 targeting 1.3375. If you get a look at 1.3375, I would almost everything off the table, because major wave 4 is just around the corner. And considering the simplistic formation of major wave 2, wave 4 is scheduled to be long and drawn out before wave 5 takes us up to 1.3400.

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.