I'm short USD/JPY from a 117.80 average with 118.10 stops, as we currently trade 117.50. The weekend gap was likely carry over from the Bush administration's Friday announcement of economic sanctions on China. And considering China is a massive holder of US currency and bonds, traders moved away from the dollar in anticipation of Chinese reaction. Further, the weekend selling can be attributed to traders discounting the implications of further tariffs in other Chinese export markets.

Japanese Tankan report is scheduled to be released at 7:50 p.m. ET tonight. Manufacturing is expected to come in at 24 and non-manufacturing is expected at 23. This report is likely to move the market, so let's book partial profits at the market, and move your stop to cost in the event the number comes in under expectations.

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

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