GBP/JPY Technical Analysis: Candle Setup Hints at Losses
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- GBP/JPY Technical Strategy: Flat
- Support: 187.80, 186.43, 184.22
- Resistance: 189.70, 191.19, 192.81
The British Pound may be carving out a top against the Japanese Yen after putting a Bearish Engulfing candlestick pattern. A daily close below the 14.6% Fibonacci retracement at 187.80 exposes the 23.6% level at 186.43. Alternatively, a reversal above the December 5 high at 189.70 clears the way for a test of the 38.2% Fib expansion at 191.19.
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