Just an amazing move in the equity markets sparked by positive reports from Wal-Mart and other major retailers put the DJIA almost 2.10% better on the day. Interestingly, US Retail Sales is scheduled from 8:30 a.m. ET tomorrow morning, and if it should disappoint considering today's explosive price action, look out below I'll bet we're giving it all up and then some. It could be a dark Friday.

In terms of the currency markets, the carry traders (EUR/JPY, UDS/JPY, EUR/CHF) bushed off all equity strength and posted percentage gains one-eighth that of the equity markets from yesterday's 5:00 p.m.close, and one-quarter that if considering New York price action only. So, if retail sales disappoints, combined with the apparent decoupling of the US equity market, carry trade correlation, I am very interested in being short USD/JPY as a trend continuation trade lower from Tuesday's move.

I am going to command a premium entry price in UDS/JPY to lessen the chance of being knocked out in a stop-run effort. I am loaded up to sell USD/JPY into former trendline support-turned-resistance, and Fib resistance at 122.75, 122.85, 122.95 with 123.10 stops.



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.