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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 172.44, 171.75, 170.90
- Resistance: 173.22, 173.74, 174.59
The British Pound is edging downward against the Japanese Yen as expected after prices put in a bearish Evening Star candlestick pattern. Near-term support is at 172.44, the 50% Fibonacci retracement, with a break below that on a daily closing basis exposing the 61.8% level at 171.75. Alternatively, a reversal above the 173.13-22 area marked by the 38.2% retracement and the 14.6% Fib expansion, opens the door for a challenge of the 23.6% threshold at 173.74.
Risk/reward considerations argue against entering long with prices trading in close proximity to 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
