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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 170.89-95, 170.24, 169.69-79
- Resistance: 171.47, 171.89, 172.57
The British Pound moved lower against the Japanese Yen as expected after producing a bearish Evening Star candlestick pattern. A daily close below support in the 170.79-95 area, marked by a rising trend line set from mid-March and the 38.2% Fibonacci expansion, exposes the 50% level at 170.24. Alternatively, a turn above the 23.6% Fib at 171.47 opens the door for a test of the 14.6% expansion at 171.89.
Risk/reward considerations argue against entering short with prices sitting squarely at 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.
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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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