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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 187.35, 186.53, 184.58
- Resistance: 188.34, 190.74, 193.47
The British Pound may be carving out a top against the Japanese Yen marked by the appearance of a bearish Evening Star candlestick pattern. A daily close below channel support at 187.35 exposes the 14.6% Fibonacci retracement at 186.53. Alternatively, a reversal above the 14.6% Fib expansion at 188.34 opens the door for a test of the 190.30-74 area marked by the channel top and the 23.6% threshold.
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
