GBP/JPY Technical Analysis: Waiting to Confirm Topping
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- GBP/JPY Technical Strategy: Flat
- Support: 180.72, 178.28, 176.32
- Resistance: 184.91, 187.30, 189.22
The British Pound may be carving out a top against the Japanese Yen after prices put in a bearish Dark Cloud Cover candlestick pattern. Negative RSI divergence reinforces the case for a decline. Near-term support is in the 180.72-181.06 area, marked by the November 10 low and the 23.6% Fibonacci, with a break below that on a daily closing basis exposing the 38.2% level at 178.28. Alternatively, a reversal above the 23.6% Fib expansion at 184.91 clears the way for a challenge of the 38.2% threshold at 187.30.
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 that taking up the long side 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.