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- GBP/JPY Technical Strategy: Flat
- Support: 168.83 (trend line), 167.76 (Mar 18 low)
- Resistance: 170.05 (23.6% Fib exp.), 171.46 (38.2% Fib exp.)
The British Pound is attempting to launch a recovery against the Japanese Yen, with prices bouncing from support at a trend line set from August 2013. Near-term resistance is at 170.05, the 23.6% Fibonacci expansion, with a break above that targeting the 38.2% level at 171.46. Alternatively, a turn below the trend line (now at 168.83) exposes the March 18 low at 167.76.
Risk/reward considerations argue against entering long with prices so close to resistance. On the other hand, taking up the short side looks premature absent a defined reversal signal. We will continue to stand aside until a more actionable setup emerges.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com