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GBP/JPY Technical Analysis: Bottom Forming Below 171.00?

GBP/JPY Technical Analysis: Bottom Forming Below 171.00?

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • GBP/JPY Technical Strategy: Flat
  • Support: 170.94, 170.50, 169.78-9
  • Resistance: 171.58, 172.30, 172.88

The British Pound declined against the Japanese Yen as expected after putting in a bearish Evening Star candlestick pattern. A daily close below the 14.6% Fibonacci expansionat 170.94 exposes the 26.6% level at 170.50. Alternatively, a turn above the 23.6% Fib retracement at 171.58 opens the door for a test of the 38.2% threshold at 172.30.

Risk/reward considerations argue against entering short with prices sitting squarely at support. Positive RSI divergence likewise discourages selling. 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: Bottom Forming Below 171.00?

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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