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GBP/JPY Technical Analysis – Broken Trend Support Retested
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Talking Points:
GBP/JPY Technical Strategy: Flat
Support: 169.86 (38.2% Fib ret.), 168.71 (50% Fib ret.)
Resistance:170.63 (trend line), 171.27 (23.6% Fib ret.)
The British Pound may be in the process of starting a significant downward reversal against the Japanese Yen after prices broke a rising trend line set from August 2013. The pair found interim support at 169.86, 38.2% Fibonacci retracement, and moved to retest the trend line (now at 170.63). A break back above this threshold targets the 23.6% retracement at 171.27. Alternatively, a push through support aims for the 50% level at 168.71.
An available trading range of 74 pips is too narrow to attempt a trade given a 20-day ATR reading at 110 pips assuming a stop-loss activated on a daily closing basis (as is the case with our strategy). We will continue to stand aside 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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