GBP/JPY Technical Analysis – A Top in Place Above 175.00?
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- GBP/JPY Technical Strategy: Flat
- Support: 173.98, 173.44, 173.13
- Resistance: 174.50, 175.35, 175.75
The British Pound may have set a top against the Japanese Yen after prices put in a bearish Evening Star candlestick pattern. Sellers are aiming to challenge support at 173.98, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the bottom of a firing channel at 173.44. Alternatively, a move back above the 14.6% level at 174.50 initially opens the door for another challenge of the July 3 high at 175.35.
Risk/reward considerations argue against entering short with prices sitting in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. 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.