GBP/JPY Technical Analysis: Down Trend Ready to Resume?
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- GBP/JPY Technical Strategy: Flat
- Support: 171.87, 171.15, 170.56
- Resistance: 172.95, 174.20, 175.35
The British Pound may be on the verge of resuming its down trend against the Japanese Yen following the formation of a Bearish Engulfing candlestick pattern. Near-term support is at 171.87, 23.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 38.2% level at 171.15. Alternatively, a turn above a falling trend line set from early July at 172.95 opens the door for a test of the July 30 high at 174.20.
Risk/reward considerations argue against entering short with prices 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.
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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.