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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: 171.74 (trend line), 173.63 (Jan 23 high)
The British Pound may be readying to turn lower against the Japanese Yen after prices put in a Shooting Star candle below a falling trend line set from early January. Near-term support is at 169.28, the 23.6% Fibonacci expansion, with a break below that targeting the 38.2% level at 167.68. Alternatively, a reversal above the trend line (now at 171.74) eyes the January 23 high at 173.63.
The Shooting Star candle is a sign of indecision and further confirmation is needed to produce an actionable reversal signal. Furthermore, the pair is too close to relevant support to justify a short trade from a risk/reward perspective. We will stand aside for now.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com