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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 177.26, 175.77, 174.36
- Resistance: 178.74, 179.94, 181.14
The British Pound is digesting after five consecutive days of gains that brought prices to a two-week high against the Japanese Yen. Near-term resistance is at 178.74, the 38.2% Fibonacci retracement, with a break above that on a daily closing basis exposing the 50% level at 179.94. Alternatively, a turn below the 23.6% Fib at 177.26 clears the way for a challenge of the 175.77-176.35 area (triple bottom, 14.6% retracement).
We see the overall GBPJPY trend as favoring the downside after last week’s break of the 12-month uptrend set from February 2014 lows. With that in mind, we will opt against entering long and treat on-coming gains as corrective, looking for the move to offer a selling opportunity once upside momentum is exhausted.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
