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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 175.65, 174.41, 172.87
- Resistance: 177.81, 179.06, 181.09
The British Pound may have set a bottom above the 175.00 figure against the Japanese Yen after producing a bullish Piercing Line candlestick pattern. Near-term resistance is at 177.81, the 14.6%Fibonacci retracement, with a break above that on a daily closing basis exposing the 23.6% level at 179.06. Alternatively a turn below the 50% Fib expansion at 175.65opens the door for a test of the 61.8% threshold at 174.41.
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
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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