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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 186.72, 184.77, 181.41
- Resistance: 189.89, 192.45, 195.01
The British Pound launched a recovery against the Japanese Yen, with buyers reclaiming a foothold above the 187.00 figure. Near-term resistance is at 189.89, the 38.2%Fibonacci expansion, with a break above that on a daily closing basis exposing the 50% level at 192.45. Alternatively a reversal turn below the 23.6% expansion at 186.72clears the way for a challenge of the 14.6% Fib retracement at 184.77.
While entering long is tempting from a purely technical perspective, we will tactically opt to stand aside. We suspect a Yen recovery on the back of year-end capital flows may be ahead, warning against taking bets on the currency’s decline. As such, 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
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