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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 187.80, 186.43, 184.22
- Resistance: 190.00, 191.36, 193.57
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 189.70-190.00 area (December 5 high, 14.6% Fib expansion) clears the way for a test of the 23.6% threshold at 191.36.
Positioning is inconclusive at this point absent confirmation of a bearish reversal, arguing against taking up the short side for the time being. We will continue to remain on the sidelines, waiting for a more compelling opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
