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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 169.28 (23.6% Fib exp.), 167.68 (38.2% Fib exp.)
- Resistance: 171.10 (trend line), 171.87 (Feb 18 high)
After weeks of stubborn consolidation, the British Pound finally looks set to move lower against the Japanese Yen as expected. Prices are testing below support is at 169.28, the 23.6% Fibonacci expansion, with a break of this barrier initially exposing the 38.2% level at 167.68. Alternatively, a push above resistance at a falling trend line set from early January (now at 171.10) targets the February 18 high at 171.87.
Confirmation of a breakdown requires a daily close below support, making a short position premature at this stage. On the other hand, a long position would require taking as given the as-yet baseless assumption that support will hold. We will continue stand aside for now until greater clarity emerges.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com