GBP/JPY Technical Analysis: Support Below 172.00 in Focus

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Talking Points:

  • GBP/JPY Technical Strategy: Flat
  • Support: 171.87, 171.15, 170.56
  • Resistance: 172.88, 174.20, 175.35

The British Pound may be preparing to decline against the Japanese Yen once again after putting in a Bearish Engulfing candlestick pattern. A daily close below the 23.6% Fibonacci expansion at 171.87 exposes the 38.2% level at 171.15. Alternatively, a reversal above falling trend line resistance set from early July at 172.88 clears the way for a challenge of the July 30 high at 174.20.

Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. With that in mind we will remain flat for now.

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GBP/JPY Technical Analysis: Support Below 172.00 in Focus

Daily Chart – Created Using FXCM Marketscope 2.0

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

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