GBP/JPY Technical Analysis: Pound Recovery Hinted Ahead

2014-10-09 07:38:51

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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 may be readying to launch a recovery against the Japanese Yen after completing a bullish Piercing Line candlestick pattern. Near-term resistance is in the 175.01-35 area marked by the July 3 high and the 50% Fibonacci retracement with a break above that on a daily closing basis exposing the 38.2% level at 176.35. Alternatively a turn below the 61.8% Fibat 173.67 opens the door for a test of the 76.4% expansion at 172.01.

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

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GBP/JPY Technical Analysis: Pound Recovery Hinted Ahead

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak Currency Strategist for DailyFX.com

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