GBP/JPY Technical Analysis: Bounce Runs Into Resistance
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- GBP/JPY Technical Strategy: Flat
- Support: 173.65, 173.13, 172.44
- Resistance: 174.32, 175.17-35, 175.86
The British Pound moved lower against the Japanese Yen as expected after producing a bearish Evening Star candlestick pattern. Prices recovered from rising trend line support set from late May to test the 23.6% Fibonacci expansionat 174.32, with a break daily close above this threshold exposing the 175.17-35 marked by the 38.2% level and the July 3 high. Alternatively, a turn back below trend line support – now at 173.65 – clears the way for a challenge of the 38.2% Fib retracement at 173.13.
Risk/reward considerations argue against entering long with prices sitting squarely at resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short 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.