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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 170.81, 170.26, 169.71-79
- Resistance: 171.58, 172.30, 172.88
The British Pound moved lower against the Japanese Yen as expected after producing a bearish Evening Star candlestick pattern. Near-term resistance is at 171.58, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 38.2% level at 172.30. Alternatively, a reversal below the 38.2% Fib expansion at 170.81 clears the way for a challenge of the 50% threshold at 170.26.
Prices are too close 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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