GBP/JPY Technical Analysis: Trying to Carve Out a Bottom
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- GBP/JPY Technical Strategy: Flat
- Support: 175.01, 173.67, 172.01
- Resistance: 176.35, 177.39, 178.41
The British Pound may be readying to turn higher against the Japanese Yen after prices put an Inverted Hammer candlestick. Near-term resistance is at 176.35, the 38.2% Fibonacci retracement, with a break above that on a daily closing basis exposing a former range bottom now recast as resistance at 177.39. Alternatively, a turn below supportin the 175.01-35 area marked by the July 3 high and the 50% level opens the door for a test of the 61.8% level at 173.67.
An Inverted Hammer is a sign of indecision and does not amount to an actionable trade signal by itself absent confirmation. On the other hand, risk/reward considerations argue against taking up the short side with prices sitting just at support. With that in mind, we will remain flat.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com