GBP/JPY Technical Analysis: Key Trend Line Under Fire
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- GBP/JPY Technical Strategy: Flat
- Support: 173.39, 173.13, 172.44
- Resistance: 173.98, 174.50, 175.35
The British Pound moved lower against the Japanese Yen as expected after producing a bearish Evening Star candlestick pattern. Prices are testing support at a rising trend line set from late May (173.39), with a daily close below that exposing the 38.2% Fibonacci retracement at 173.13. Alternatively, a reversal above the 23.6% Fib at 173.98 opens the door for a move to the 14.6% retracement at 174.50.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal argues against taking up the long 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.