GBP/JPY Technical Analysis: Passing on Long Trade Setup
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- GBP/JPY Technical Strategy: Flat
- Support: 185.01, 183.51, 181.08
- Resistance: 187.44, 189.41, 191.37
The British Pound advanced for a third consecutive day against the Japanese Yen, setting a new six-year high. A daily above the 38.2% Fibonacci expansion at 187.44 exposes the 50% level at 189.41. Alternatively, a turn below the 23.6% Fib at 185.01 opens the door for a test of the 14.6% expansion at 183.51.
While entering long seems compelling, negative RSI divergence warns of ebbing upside momentum and hints a reversal downward may be on the horizon. With that in mind, we will remain on the sidelines for the time being and wait for a more compelling setup to present itself.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com