USDJPY has a good 80 points to move lower into our 121.65 target mentioned this morning. Channel resistance, the top of wave 4 of 5 down, and this morning's breakdown level all fall in at around 122.45. These are 3 pretty solid reasons to say 122.55 should not trade before 121.65 does.

The 10 Yr bond yield closed the session below the psychologically important 5.0% at 4.998%, which should encourage the Dollar bears to continue the USDJPY move lower. For tonight I am loaded up to sell USDJPY at 122.45 with a 122.62-area stop. The initial take profit and stop loss to cost level is 122.05, to carry the rest into 121.65. From there, I will look to flip and go long here with stops below 121.50.



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

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