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GBP/JPY Technical Analysis: Bounce Runs Into Resistance

GBP/JPY Technical Analysis: Bounce Runs Into Resistance

2014-07-16 22:02:00
Ilya Spivak, Sr. Currency Strategist
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Talking Points:

  • 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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GBP/JPY Technical Analysis: Bounce Runs Into Resistance

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.

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