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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 174.10, 173.43, 172.70
- Resistance: 174.91, 175.17, 175.84
The British Pound extended higher against the Japanese Yen as expected after prices produced a Bullish Engulfing candlestick pattern. Near-term resistance lines up in the 174.64-91 area, marked by the 50% Fibonacci expansion and a rising channel top. A daily close above that initially exposes the 61.8% level at 175.17. Alternatively, a turn back below the 38.2% Fib at 174.10 clears the way for a challenge of the 23.6% expansion at 173.43.
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
