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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 177.53, 175.67, 174.26
- Resistance: 178.61, 180.36, 181.78
The British Pound may be readying to turn higher against the Japanese Yen after completing a Bullish Engulfing candlestick pattern. Near-term resistance is at 178.61, the 23.6%Fibonacci retracement, with a break above that on a daily closing basis exposing the 38.2% level at 180.36. Alternatively a turn below the 14.6% retracement at 177.53opens the door for a test of the 38.2% Fib expansion at 175.67.
Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests that taking up the short side is premature. With that in mind, we will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
