Just back from vacation and isn't it just like the markets to break lose when you step off the desk for a few days? The USD is moving into levels not see in over 2 decades against Sterling and Kiwi, 18 years against Aussie, and is approaching all-time highs against the Euro. The stock market is forming a 13,250-13,700 range as the US year Bond Yield closed the June 5.0% gap. Below 5.0% gap and we are looking at 4.965% area Fib support. If the 10 yr note moves higher (yield lower) into this zone and begins to show signs of reversal, I will be looking for a corresponding bounce higher in the USD.



USDJPY is facing channel support at around 121.75. This could complete the 4th wave of the 5-wave move above the 124.00-area highs.



Within this pending 4th wave completion, a 3-wave a,b,c correction is in formation. Legs a and c will be equal at 121.70, which nicely aligns with the daily chart uptrend channel. I will be looking to setup long trades here for tonight. I am also watching a handful of long-term wave and Fib resistance levels in Aussie at 0.8600.



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

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