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Talking Points:

• GBP/JPY Technical Strategy: Flat

• Support: 193.85, 192.80, 190.91

• Resistance: 195.48, 197.50, 199.51

The British Pound is consolidating gains after rising to the highest level in seven years against the Japanese Yen. A daily close above the 38.2% Fibonacci expansion at 195.48 exposes the 50% level at 197.50. Alternatively, a reversal below trend line support at 193.85 clears the way for a test of the 14.6% Fib retracement at 192.80. Negative RSI divergence argues in favor of a downside scenario.

Positioning is inconclusive at this point, with prices offering no clear-cut and actionable signal to initiate a long or short trade. We will continue to remain on the sidelines for the time being, waiting for a compelling opportunity to present itself.

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

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