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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 171.91 (23.6% Fib exp.), 171.37 (38.2% Fib exp.)
- Resistance:172.66 (triangle top)
The British Pound may be readying to turn lower against the Japanese Yen after prices put in a Bearish Engulfing candlestick pattern below resistance at the top of a Triangle setup carved out since the beginning of the year. Near-term support is at 171.91, the 23.6% Fibonacci expansion, with a break below that aiming for the 38.2% level at 171.37. Triangle resistance is now at 172.66.
Risk/reward considerations argue against taking a short position with prices trading in close proximity to relevant support. We will remain flat for the time being, waiting for a more attractive setup to present itself.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com