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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 183.70, 182.92, 181.79
- Resistance: 184.97, 186.00, 187.03
The British Pound may be preparing reverse lower against the Japanese Yen after prices put in a bearish Dark Cloud Cover candlestick pattern. A daily close below the 23.6% Fibonacci expansion at 183.70 exposes the 14.6% level at 182.92. Alternatively, a turn above the 38.2% Fib at 184.97 opens the door for a test of the 50% expansion at 186.00.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long 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
