The more and more I look at the EUR/USD chart, the more it looks like a move towards 1.3840 to complete this massive wave 3 up is possible. EUR/JPY on the other hand is looking heavy, especially if 167.80 is broken, so if we are looking to be Dollars, this means USD/JPY is the ticket.

USD/JPY completed 5-waves up to the 124.13 high in mid-June, and has since moved lower in what appears to be corrective price action. If my count is correct, then we have a remaining corrective wave c that should reach the prior a-wave lows of 120.93. Or, if a new 5-wave impulse move lower is underway, we are in wave 3 that should test the prior wave 1 lows at a minimum. For tonight, I am looking to stop into shorts at 121.75 with stop losses just above 122.00, and an initial take profit at 121.05. If my 121.05 limit is done, I will trail the stop to below the original entry on the balance of the position.



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

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