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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 178.03, 177.10, 176.17
- Resistance: 178.72, 180.15, 181.08
The British Pound may have marked a key bearish reversal against the Japanese Yen after prices broke below a trend line guiding prices higher for five months. Near-term support is at 178.03, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis exposing the 50% level at 177.10. Alternatively, a reversal above trend line support-turned-resistance at 178.72 clears the way for a challenge of the 38.2% Fib retracement at 180.15.
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
