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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 172.64, 171.79, 171.26
- Resistance: 173.33, 174.01, 174.87
The British Pound broke out upward against the Japanese Yen, overturning the down trend initiated from the July swing top. A daily close abovethe 50% Fibonacci expansion at 173.33 exposes the 61.8% level at 174.01. Alternatively, a reversal below the intersection of the 38.2% Fib and trend line resistance-turned-support at 172.64 clears the way for a challenge of the 23.6% expansion at 171.79.
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 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 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com