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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 172.30, 171.58, 170.56
- Resistance: 172.88-173.08, 173.47, 174.19
The British Pound began a correction upward against the Japanese Yen as expected following the appearance of positive RSI divergence. Near-term resistance is at 172.88-173.08 area, marked by the 50% Fibonacci retracement and a falling trend line set from early July, with a break above that on a daily closing basis exposing the 61.8% level at 173.47. Alternatively, a turn below the 38.2% Fib at 172.30 opens the door for a test of the 23.6% expansionat 171.58.
The available trading range is too narrow to justify taking a short or a long position at current levels from a risk/reward perspective. We will remain flat for now, waiting for a more attractive 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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