GBP/JPY Technical Analysis: Breakdown in the Works?
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- GBP/JPY Technical Strategy: Flat
- Support: 176.35, 175.01, 173.67
- Resistance: 179.31, 180.97, 182.31
The British Pound looks vulnerable to deeper losses against the Japanese Yen after prices took out trend support set from early September. Near-term support is in the 176.35-63 area, marked by the September 23 low and the 38.2% Fibonacci retracement, with a break below that on a daily closing basis exposing the 50% level at 175.01. Alternatively, a reversal above the intersection of the broken trend lien and the 23.6% Fib expansion at 179.31 opens the door for a test of the 180.69-97 region bracketed by the 38.2% threshold and the September 19 high.
While the break through trend line support makes for a compelling selling opportunity, overall positioning since mid-month has looked relatively range-bound. With that in mind, we prefer to see evidence of follow-through before committing to a trade. As such, we 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.