There was no mention of carry trade concern from the Group of 8 nations this weekend in Germany. As a result, the carry trades gapped up slightly tonight and are looking to want to continue higher.

The EUR/JPY push from 150.76 has unfolded in 4 complete waves thus far and the fifth is in progress. I have projected the textbook end of the wave 5 to be between 165.67 and166.05. Wave 1 traveled a total of 494 points. In classic Elliott theory, wave 1 and 5 will often be equal in distance, or somehow proportional with relation to Phi. 494 points projected up from the beginning of wave 5 at 161.11 yields 166.03. Next, the end of the 5-wave impulse will often be either 1.618, 2.0, or 2.618 projection of wave 1 up from wave 2. The 2.618 projection is right in the neighborhood at 165.69.

Currently, we trade 163.80, so we have 2 big figures of trend remaining to work with. For tonight, I am bidding for a gap-close pullback to 163.65 to get long with stops below 50.



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.