Price action was a little choppy and unpredictable in the New York afternoon session. Looking ahead for the rest of the week, we have several crucial central bank rate decisions and non-farm payrolls on Friday, which could be contributing to the sloppy price action.

I have wave A and B labeled as complete, which means I am anticipating a wave C break above 1.2750 targeting one of three possible sources of resistance. The first is equability of wave C compared to wave A, provided B low remains as is at 1.2665. If wave B pushes below 1.2665 tonight, the equality level of between A and C will move lower. The .618 retracement is nearby at 1.28813. The second target is the old B wave paired up with the .786 retracement at 1.2968. The third and final target is the triangle resistance originating from the top of wave A on 10/29/08.

Currently, I am long a half unit of EUR/USD at 1.2700 with a stop for that half unit at 1.2625. I know it's a generous stop, but I don't want to shaken out before the move comes. Also, I am watching a key level of 1.2640/50 support to possibly add 1 unit to the long position with stops for everything at 1.2625. If I get filled on any longs at 1.2640/50, I will trade out of them on a retest of the New York 1.2760, and hold that core long from 1.2700 for the move up to one of our three targets.



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

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