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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 183.51, 181.08, 179.28
- Resistance: 185.01, 187.44, 189.41
The British Pound advanced to a six-year high against the Japanese Yen but follow-through may prove lacking as negative RSI divergence hints at ebbing momentum. Near-term resistance is at 185.01, the 23.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 38.2% level at 187.44. Alternatively, a reversal below the 14.6% Fib at 183.51 clears the way for a challenge of the November 17 low at 181.08.
Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests that taking up the short 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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