Forex: GBP/JPY Technical Analysis – Key Trend Line Under Fire
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- GBP/JPY Technical Strategy: Flat
- Support: 167.57-168.00 (61.8% Fib ret., trend line), 166.15 (76.4% Fib ret.)
- Resistance: 168.71 (50% Fib ret.), 169.86 (38.2% Fib ret.)
The British Pound declined against the Japanese Yen as expected having found a top below the 174.00 figure. Prices are testing support at rising trend line set from August 2013 – now at 168.00 – a barrier reinforced by the 61.8% Fibonacci retracementat 167.57. A break below the latter level initially exposes the 76.4% Fib at 166.15. Alternatively, a move back above the 50% retracement at 168.71 targets the 38.2% level at 169.86.
Risk/reward considerations continue to argue against taking a short position with prices trading in close proximity to relevant support. On the other hand, a long position taken on the assumption that support will hold seems premature without a defined reversal signal. We will continue to stand aside for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com