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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 175.01, 173.67, 172.01
- Resistance: 176.35, 177.39, 178.41
The British Pound came under renewed selling pressure after a period of consolidation, issuing the largest daily drop in seven months against the Japanese Yen. A daily close below the 175.01-35 area marked by the July 3 high and the 50% Fibonacci retracement exposes the 61.8% level at 173.67. Alternatively, a turn back above the 38.2% level at 176.35 sees the next upside barrier at 177.39, a former range support now recast as resistance.
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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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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