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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 173.87, 173.39, 172.61
- Resistance: 174.64, 175.35, 176.43
The British Pound may have carved out a top against the Japanese Yen after prices put in a Bearish Engulfing candlestick pattern. A daily close below the 14.6% Fibonacci retracement at 173.87 exposes the 23.6% level at 173.39. Alternatively, a turn above the September 12 high at 174.64 clears the way for a challenge of the July 3 top at 175.35.
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 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 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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