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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 172.34, 171.63, 170.41
- Resistance: 173.33, 173.93, 175.35
The British Pound jumped sharply higher against the Japanese Yen, posting the largest daily gain in eight months. Near-term resistance is in the 173.05-33 area, marked by a rising trend line and the 61.8% Fibonacci retracement, with a break above that on a daily closing basis exposing the 76.4% level at 173.93. Alternatively, a turn below the 50% Fib at 172.34 opens the door for a test of the 38.2% retracement at 171.63.
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 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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