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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 171.79, 171.26, 170.61
- Resistance: 172.64-83, 173.33, 174.01
The British Pound is attempting to overturn the down trend initiated against the Japanese Yen in early July above the 175.00 figure. Near-term resistance is in the 172.64-83 area, marked by the 38.2% Fibonacci expansion and a falling trend line. A break above that on a daily closing basis exposes the 50% level at 173.33. Alternatively, a turn below the 23.6% Fib at 171.79 opens the door for a test of the 14.6% expansion at 171.26.
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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