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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 181.64, 180.18, 178.39
- Resistance: 183.09, 184.88, 187.79
The British Pound appears set to test above the 183.00 figure against the Japanese Yen after rising to the highest level in over a month. A daily close above the 61.8% Fibonacci retracementat 183.09 exposes the 76.4% level at 184.88. Alternatively, a reversal below the 50% Fib at 181.64 opens the door for a test of the 38.2% retracement at 180.18.
While entering long seems tempting, we will tactically opt to stand aside. A strong correlation between GBPJPY and the S&P 500 stock index hints at a high sensitivity to sentiment trends. That makes a long trade vulnerable to the breakout of risk aversion if upcoming negotiations between Greece and the EU are unsuccessful. 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
