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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 189.13, 187.79, 185.01
- Resistance: 190.00, 191.36, 193.57
The British Pound put in a Harami candlestick pattern coupled with negative RSI divergence, hinting it may be carving out a top against the Japanese Yen. Near-term trend line support is at 189.13, with a break below that on a daily closing basis exposing the December 29 high at 187.79. Alternatively, a move abovethe 189.70-190.00 area (December 5 high, 14.6% Fibonacci expansion) opens the door for a challenge of the 23.6% level 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
