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Forex: GBP/JPY Technical Analysis – Breakout Risk on the Rise

Forex: GBP/JPY Technical Analysis – Breakout Risk on the Rise

2014-02-25 03:32:00
Ilya Spivak, Head Strategist, APAC
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Talking Points:

  • GBP/JPY Technical Strategy: Flat
  • Support: 169.28 (23.6% Fib exp.), 167.68 (38.2% Fib exp.)
  • Resistance: 171.48 (trend line), 173.63 (Jan 23 high)

Prices put in a Shooting Star candlestick below resistance at a trend line set from early January, warning the British Pound is losing bullish momentum and may be preparing to turn lower against the Japanese Yen. A break below the 23.6% Fibonacci expansion at 169.28 initially targets the 38.2% level at 167.68. Alternatively, a push above trend line resistance (now at 171.48) targets the January 23 high at 173.63.

Several back-to-back indecision candles reinforce the idea that previously established momentum has lost steam while flat-lining daily change readings warn a breakout may be near as volatility returns to more normal levels. Directional confirmation remains absent however and we will wait for a clear tipping of the scales to search out a trading opportunity.

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dailyclassics_gbp-jpy_body_Picture_11.png, Forex: GBP/JPY Technical Analysis – Breakout Risk on the Rise

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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