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GBP/JPY Technical Analysis: Waiting to Confirm Topping

GBP/JPY Technical Analysis: Waiting to Confirm Topping

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • 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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GBP/JPY Technical Analysis: Waiting to Confirm Topping

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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