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- GBP/JPY Technical Strategy: Flat
- Support: 172.00 (61.8% Fib exp.), 171.53 (50% Fib exp.)
- Resistance: 172.21 (trend line), 172.59 (76.4% Fib exp.)
The British Pound managed to claw its way back above the 172.00 level against the Japanese Yen on the back of supportive rhetoric from BOE Governor Carney. Prices are testing resistance at 172.21 marked by a falling trend line set from January. A daily close above this barrier initially exposes the 76.4% Fibonacci expansion at 172.59. Alternatively, a reversal back below the 61.8% Fib at 172.00 clears the way for a test of the 50% expansion at 171.53.
Risk/reward considerations argue against entering long with prices sitting squarely at resistance. On the other hand, taking up the short side is premature absent a defined bearish reversal signal. We will remain flat for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com