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Talking Points:
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GBP/JPY Technical Strategy: Flat
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Support: 176.35 175.01 173.67
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Resistance: 179.31 180.97 182.31
The British Pound looks vulnerable to deeper losses against the Japanese Yen after prices took out trend support set from early September. Near-term support is in the 176.35-63 area marked by the September 23 low and the 38.2% Fibonacci retracement with a break below that on a daily closing basis exposing the 50% level at 175.01. Alternatively a reversal above the intersection of the broken trend lien and the 23.6% Fib expansion at 179.31 opens the door for a test of the 180.69-97 region bracketed by the 38.2% threshold and the September 19 high.
While the break through trend line support makes for a compelling selling opportunity overall positioning since mid-month has looked relatively range-bound. With that in mind we prefer to see evidence of follow-through before committing to a trade. As such we 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
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