GBP/JPY Technical Analysis: Passing on Long Trade Setup
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- GBP/JPY Technical Strategy: Flat
- Support: 178.61, 177.53, 175.67
- Resistance: 180.36, 181.78, 183.20
The British Pound edged higher against the Japanese Yen as expected after prices completed a Bullish Engulfing candlestick pattern. A daily close above the 38.2%Fibonacci retracement at 180.36 exposes the 50% level at 181.78. Alternatively, a reversal below the 23.6% retracement at 178.61clears the way for a challenge of the 14.6% Fib expansion at 177.53.
While entering long seems compelling from a purely technical perspective, we will tactically opt to stand aside. Yen crosses are intimately correlated with S&P 500, pointing to deep sensitivity risk appetite trends. That means prices are highly vulnerable to potentially dramatic sentiment swings triggered by the upcoming FOMC policy announcement that derails technical positioning. With that in mind, we will stand aside.
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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.