GBP/JPY Technical Analysis: Candle Setup Hints at Bounce
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- GBP/JPY Technical Strategy: Flat
- Support: 175.65, 174.41, 172.87
- Resistance: 177.81, 179.06, 181.09
The British Pound may be preparing to launch a recovery against the Japanese Yen after putting in a bullish Piercing Line candlestick pattern. A daily close above the 14.6%Fibonacci retracement at 177.81 exposes the 23.6% level at 179.06. Alternatively a reversal below the 50% Fib expansion at 175.65clears the way for a challenge of the 61.8% threshold at 174.41.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short 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
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.