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Talking Points:
- GBP/JPY Technical Strategy: Flat
- Support: 173.67, 172.01, 170.41
- Resistance: 175.35, 176.35, 177.39
The British Pound is struggling to build higher after signaling a bottom in the works against the Japanese Yen with a Piercing Line candlestick pattern. A daily close above the 175.01-35 area marked by the July 3 high and the 50% Fibonacci retracement exposes the 38.2% level at 176.35. Alternatively, a reversal below the 61.8% Fibat 173.67 clears the way for a challenge of the 76.4% expansion at 172.01.
Positioning is uncertain at this point. On one hand, follow-through on the bullish candlestick setup remains absent, warning against entering long. On the other, the setup remains technically valid absent a daily close below 173.42, the pattern’s low. We will opt to remain on the sidelines for now, waiting for greater clarity.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com