I will be looking to pick up some EUR/JPY at a discount tonight for the completion of wave 3 into our 164.10 target. I am bidding into our first two retracement levels at 163.05 and 162.95 to get long a half-size position in total. For that half, I am a stop loss seller at 162.75. If we break through 163.36 on the topside, I will look to put the other half of the position on and pull the stop on the full size to around 163.15.

Following a much better than expected 10:00 a.m. Factory Orders number, USD/JPY made its move to an approximate120.28 high, just a touch shy from one of the most significant levels USD/JPY has seen this year. 45 days ago in late February, USD/JPY broke down from 120.35 in a panic as Chinese equities were well on their way to posting a single session loss of 9.9%. This carried over to the Dow the next day (closing approximately 450 points lower on the session), which ultimately became the catalyst for the unwinding of the carry trade. USD/JPY traded all the way down to a 115.18 low in early March, and has since re-gained all 500 lost points. So for tonight, were back at the 120.35 level that started it all.

I believe USD/JPY will find some serious resistance at this point, and considering how weak EUR/USD was today, I believe we will get a shot to get long EUR/JPY around the figure tonight.



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.