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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 172.64, 171.79, 171.26
- Resistance: 173.33, 174.01, 174.87
The British Pound launched upward against the Japanese Yen as expected, with prices touching the highest level in over a month. Near-term resistance is at 173.33, the 50% Fibonacci expansion, with a break above that on a daily closing basis exposing the 61.8% level at 174.01. Alternatively, a turn below the intersection of the 38.2% Fib and trend line resistance-turned-support at 172.64 opens the door for a test of the 23.6% expansion at 171.79.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. 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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