GBP/JPY Technical Analysis – Pound Ready to Renew Rally?
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- GBP/JPY Technical Strategy: Flat
- Support: 173.00, 172.34-47, 171.80
- Resistance: 173.43, 174.08-10, 174.64
The British Pound may be readying to launch the next leg of its month-long advance against the Japanese Yen after showing a Bullish Engulfing candlestick pattern. Near-term resistance is at 173.43, the 23.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 174.08-10 area marked by the June 20 high and the 38.2% level. Alternatively, a reversal below the 173.00 figure clears the way for a challenge of support in the 172.34-47 zone, bracketed by a rising channel bottom and the 38.2% Fib retracement.
Prices are too close to relevant resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal argues against taking up the short side. We will remain flat for now.
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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.