GBP/JPY Technical Analysis: Passing on Short Trade Setup
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- GBP/JPY Technical Strategy: Flat
- Support: 177.91, 176.23, 174.15
- Resistance: 179.58, 181.58, 183.91
The British Pound continues to push downward against the Japanese Yen having topped as expected after forming a Head and Shoulders chart pattern. Near-term support is at 177.91, the 50% Fibonacci expansion, with a break below that on a daily closing basis exposing the 61.8% level at 176.23. Alternatively, a turn above the 38.2% Fib at 179.58 clears the way for a challenge of neckline support-turned-resistance at 181.58.
While entering short is compelling from a purely technical perspective, we will tactically opt against taking a position at this point. We already have significant British Pound exposure via EURGBP and GBPUSD and will withhold from further increasing concentration of GBP-linked risk.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com