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- GBP/JPY Technical Strategy: Flat
- Support: 169.95 (trend line), 169.37 (38.2% Fib exp.)
- Resistance:170.97 (23.6% Fib exp.), 173.13-56 (Mar 7 high, Apr 3 high)
The British Pound continued to push lower against the Japanese Yen, with prices now set to test major trend line support set from August 2013. A break below this barrier (now at 169.95) initially exposes the 38.2% Fibonacci expansion at 169.37. Alternatively, a reversal above the 23.6% level at 170.97 targets the 173.13-56 area, marked by the March 7 and April 3 swing highs.
Risk/reward considerations argue against entering short with prices trading in close proximity to relevant support. On the other hand, taking up the long side looks premature absent a defined bullish reversal signal. With that in mind, we will remain flat for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com