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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 173.43, 172.36-58, 171.28
- Resistance: 174.10, 174.81, 175.17
The British Pound continued to push higher as expected against the Japanese Yen after showing a Bullish Engulfing candlestick pattern. Buyers are now testing resistance at 174.10, with a break above that on a daily closing basis exposing the 174.64-81 area marked by the 50% level and a rising channel top. Alternatively, a reversal back below the 23.6% Fib at 173.43 opens the door for a test of the channel bottom at 172.58.
Risk/reward considerations argue against entering long with prices sitting squarely at relevant resistance. On the other hand, while negative RSI divergence warns of ebbing bullish momentum, the absence of a defined bearish reversal signal hints entering short is premature. We will remain flat.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
