GBP/JPY Technical Analysis: 5-Month Support Under Pressure
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- GBP/JPY Technical Strategy: Flat
- Support: 171.96, 171.56, 170.66
- Resistance: 172.45, 173.49, 174.20-53
The British Pound moved lower against the Japanese Yen as expected after producing a bearish Evening Star candlestick pattern. A daily close below support at 171.96, marked by a rising trend line set from mid-March, exposes the 50% Fibonacci retracement at 171.56. Alternatively, a turn above the 38.2% level at 172.45 clears the way for a test of the August 5 high at 173.49.
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 suggests entering long is premature. With that in mind, 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.