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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 178.44, 176.90, 175.65
- Resistance: 179.38, 180.70, 181.65
The British Pound dipped to the lowest level since late October against the Japanese Yen but a Hammer candle warns a bounce may be ahead. A daily close above the 14.6%Fibonacci expansionat 179.38 exposes the 14.6% Fib retracement at 180.70. Alternatively, a move below the 23.6%expansionat 178.44clears the way for a challenge of the 38.2% level at 176.90.
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
