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- GBP/JPY Technical Strategy: Flat
- Support: 168.08 (50% Fib exp., trend line), 166.79 (61.8% Fib exp.)
- Resistance: 169.37 (38.2% Fib exp.), 170.97 (23.6% Fib exp.)
The British Pound declined against the Japanese Yen as expected, with prices now testing pivotal support marked by a rising trend line set from August 2013. This barrier is reinforced by the 50% Fibonacci expansion at 168.08. A break below this boundary exposes the 61.8% level at 166.79. Alternatively, a reversal above resistance at 169.37 marked by the 38.2% Fib targets the 23.6% expansion at 170.97.
Passing on a would-be long trade setup yesterday proved prudent. From here, prices are too close to relevant support to make a short position attractive from a risk/reward perspective. On the other hand, entering long appears premature without a defined reversal signal. We will continue to stand aside for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com