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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 171.87, 171.15, 170.56
- Resistance: 172.88, 174.20, 175.35
The British Pound may be preparing to decline against the Japanese Yen once again after putting in a Bearish Engulfing candlestick pattern. A daily close below the 23.6% Fibonacci expansion at 171.87 exposes the 38.2% level at 171.15. Alternatively, a reversal above falling trend line resistance set from early July at 172.88 clears the way for a challenge of the July 30 high at 174.20.
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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