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Talking Points:

• GBP/JPY Technical Strategy: Flat

• Support: 175.77, 175.01, 174.00

• Resistance: 177.26, 178.03, 179.28

The British Pound is digesting losses against the Japanese Yen after producing the largest daily drop in a month. A daily close below the 175.77-176.01 area (triple bottom, 38.2% Fibonacci expansion) exposes the 50% level at 175.01. Alternatively, a reversal above the 23.6% Fib at 177.26 opens the door for a test of the 14.6% expansion at 178.03.

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

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Daily Chart - Created Using FXCM Marketscope

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

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