The two most technically significant levels on the hourly EUR/JPY to commence our shorting campaign are 163.15 and 163.50 . 163.15 is derived from an A=C 104 point measured move into the .618 retracement of waves 2-5. 163.50 is broken trendline support (blue) that now stands as resistance from the 3 hour chart posted this morning, along with the .786 retracement of waves 2-5. Lastly, projected parallel channel resistance from the 161.75 and 162.09 lows both overlay (light gray) onto our focus levels.

Personally, I am going to break these levels up and treat them as separate trades. Stop losses cannot be responsibly be placed any closer than 163.60, and considering our first entry is 163.15, I don't want to be on hook for 45 points on even one lot. So for tonight, I am loaded up to sell two-thirds of my full position size at around 163.15, with a stop loss for everything just above 163.30. If I am stopped out, then I will look to re-load with a full position size at 163.47 with stops at 163.65. 162.80 should be considered significant technical support on the way back down, so use this level to book partials profits and move stops lower to reduce risk .



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.