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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 170.87 (trend line), 169.86 (38.2% Fib ret.)
- Resistance: 171.27 (23.6% Fib ret.), 173.56 (Mar 7 high)
The British Pound is losing ground against the the Japanese Yen as expected after producing a Shooting Star candlestick. A break below support at 171.27, the 23.6% Fibonacci retracement, has exposing falling trend line resistance-turned-support at 170.87. A push below this barrier targets the 38.2% level at 169.86. Alternatively, a move back above 171.27 aims for the March 7 swing high at 173.56.
Prices are too close to relevant support to justify a short position from a risk/reward perspective. A viable reversal signal arguing in favor of a long trade is absent for the time being however. On balance, we will remain on the sidelines until a more actionable setup presents itself.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com