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Talking Points:
- GBP/JPY Technical Strategy: Short at 172.26
- Support: 169.86 (38.2% Fib ret.), 168.71 (50% Fib ret.)
- Resistance:171.63-172.30 (trend line cluster), 172.82 (triple top)
The British Pound corrected higher against the Japanese Yen after declining as expected but the move higher appears corrective. Resistance is marked by a trend line cluster in the 171.63-172.30 area. A daily close above the latter level clears the way for a test of triple top resistance at 172.82.Initial support comes in at 169.86, the 38.2%Fibonacci retracement. A break below that exposes the 50% Fib at 168.71.
We sold GBPJPY at 172.26 and took profit on half of the positionat 171.27. The series of lower highs and lower lows – the definition of a down trend – initiated from the May 2 peak remains in place. As such, we will keep the remainder of the trade in play with a stop-loss set to the breakeven level (172.26).
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
