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- GBP/JPY Technical Strategy: Flat
- Support: 173.53, 173.13, 172.44
- Resistance: 174.32, 175.17, 175.86
The British Pound declined as expected against Japanese Yen after prices put in a bearish Evening Star candlestick pattern. Prices bounced from support at a rising trend line set from late May to challenge resistance at 174.32, the 23.6% Fibonacci expansion. A break above this barrier on a daily closing basis exposes the 38.2% level at 175.17. Alternatively, a reversal below trend line support – now at 173.53 – targets the 38.2% Fib retracement at 173.13.
Risk/reward considerations argue against entering long with prices sitting squarely at resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope 2.0