Our USD/CAD stops were triggered as I watched the market from home this morning, just minutes before my dentist appointment. Stopped out and news that the wisdom teeth are coming out next week, all within a few hours? I've had better days.

As I've mentioned early this week, the markets are very tricky in these consolidation phases. I was having a very solid month in terms of profit and loss, but have given approximately 40% of my gains back in the past week. I recognized this and reduced my position size. You need to adapt to the markets just about as fast as the market itself can change.

Speaking of consolidation, Aussie is in a 4th wave, complex consolidation that can be expected to move lower before we see it higher. Many Elliotticians are labeling this move up from 0.8230 as the first wave of 5 up to complete the longer-term wave 5 up. I believe it's premature to label this move up as an impulse trend wave. The internals of this move are choppy and overlapping suggesting correction.



Even if I am wrong about the corrective labeling of this wave and it is in fact wave 1 of 5 up, then we can expect a 3-wave move down to be labeled as 2 of 5. So, I am short Aussie at 0.8353 average with stops above 0.8373. If 0.8330 deals, I will book profits on a quarter position and pull stops to breakeven on the other 's. At 50% retracement of this move up at 0.8295, I will book majority profits. Then, if the market calls that wave 2 with wave 3 up around the corner, we will reassess the count with some profit in our account.



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.