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The British Pound appears vulnerable to deeper losses against the Japanese Yen after prices broke support at a rising trend line set from early February. Sellers are now testing the 23.6% Fibonacci retracement at 171.27, with a break below that exposing the 38.2% level at 169.86. Alternatively, a reversal back above 172.15 – the intersection of the trend line and the 14.6% Fib – targets horizontal resistance at 172.82.
Prices are too close to relevant support to justify a short position at current levels from a risk/reward perspective. We will stand aside for now, looking for a break downward or a corrective bounce to yield a selling opportunity.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com