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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 192.82, 191.32, 190.11
- Resistance: 194.58, 195.82, 196.79
The British Pound may be preparing to turn lower against the Japanese Yen once again after prices produced a Bearish Engulfing candlestick pattern. Near-term support is at 192.82 (23.6% Fibonacci retracement, trend line), with a break below that on a daily closing basis exposing the 38.2% level at 191.32. Alternatively, a push above the 38.2% Fib expansion at 194.58 opens the door for a challenge of the 195.69-82 area (50% threshold, June 18 high).
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for an actionable opportunity to present itself.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
