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GBP/JPY Technical Analysis: Eying Support Above 188.00

GBP/JPY Technical Analysis: Eying Support Above 188.00

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • GBP/JPY Technical Strategy: Flat
  • Support: 188.51, 186.93, 184.37
  • Resistance: 189.79, 191.07, 191.97

The British Pound is pushing aggressively lower for second straight day against the Japanese Yen, sinking to touch the lowest level in six weeks. From here, a break below the 61.8% Fibonacci expansion at 188.51 on a daily closing basis exposes the 76.4% level at 186.93.

While aggressive downside momentum looks likely to keep the pair firmly under pressure, thin liquidity conditions elevate the risk of swift intraday reversals. With that in mind, a turn back above the 50% Fib at 189.79 opens the door for a test of the next upside barrier at 191.07, the 38.2% expansion.

An actionable trading opportunity is absent at this point. The absence of confirmation on a daily closing basis means a breach of the 50% Fib can’t be taken as a given. In fact, even if the break were confirmed the pair is too close to the 61.8% barrier to make a short attractive on a risk/reward basis. Alternatively, no viable bullish reversal signal is present to justify taking up the long side. With that in mind, we will continue to monitor developments from the sidelines.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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