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Talking Points:

• GBP/JPY Technical Strategy: Flat

• Support: 173.37, 172.01, 170.41

• Resistance: 175.35, 176.35, 177.39

The British Pound slumped below the 174.00 figure against the Japanese Yen, hitting a three-week low. A daily close below the 61.8% Fibonacci retracement at 173.67 exposes the 76.4% level at 172.01. Alternatively, a reversal above the 175.01-35 area marked by the July 3 high and the 50% Fib clears the way for a challenge of the 38.2% expansion at 176.35.

Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.

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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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