I'm glad to see the dollar slightly bid heading into the new trading day, so we can look to establish entries at prices that are not so extended. A possible reason for the late-day dollar strength, which does not make me so happy, could be the sharp 5 bps jump in the 10-year bond yield into the Chicago close. The stock market definitely took notice and gave back half of the day's gains. Talking to a fellow trader, he pointed out a very significant trendline break higher in the bond yield that will come in at around 4.75%. If this sort of theme continues, my enthusiasm for EUR/USD 1.3700 will certainly wane.

The EUR/USD is the plan of attack for tonight. I am bidding for EUR/USD in halves at 82 and 65 with stops at 1.3550. The top end of the larger wave iii is projected to end at 1.3620. So if we deal up to this zone, I will take majority profits on anything long and tighten up the stops.



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

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