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GBP/JPY Technical Analysis: Pound Drops to 5-Week Low

GBP/JPY Technical Analysis: Pound Drops to 5-Week Low

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • GBP/JPY Technical Strategy: Flat
  • Support: 172.44, 171.75, 170.90
  • Resistance: 173.13, 173.98, 174.50

The British Pound is pushing lower as expected against the Japanese Yen after prices put in a bearish Evening Star candlestick pattern. Near-term support is at 172.44, the 50% Fibonacci retracement, with a break above that on a daily closing basis exposing the 61.8% level at 171.75. Alternatively, a reversal back above the 38.2% Fib at 173.13 opens the door for a challenge of the door for a challenge of the 23.6% retracement at 173.983.

Risk/reward considerations argue against entering short with prices trading 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.

Add these technical levels directly to your charts with our Support/Resistance Wizard app!

GBP/JPY Technical Analysis: Pound Drops to 5-Week Low

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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