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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 173.44, 172.59, 171.75
- Resistance: 173.96, 174.82, 175.35-50
The British Pound launched a recovery against the Japanese Yen having found support below the 173.00 figure. Near-term resistance is at 173.96, the 23.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 38.2% level at 174.82. Alternatively, a reversal back below the 14.6% Fib at 173.44 opens the door for a challenge of the door for a challenge of the July 23 low at 173.59.
Risk/reward considerations argue against entering short with prices trading in close proximity to 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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