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The British Pound may be readying to turn lower against the Japanese Yen after prices put in a Hanging Man indecision candle below resistance at 170.64, the 61.8% Fibonacci retracement. A break below support at 169.35, the 50% level, targets the 38.2% Fib at 168.05. Alternatively, a reversal above resistance on a daily closing basis eyes the 76.4% retracement at 172.24.
Entering short presently looks premature absent confirmation on a daily close below support. Furthermore, prices are too close to the downside barrier to justify a trade from a risk/reward perspective. We will remain on the sidelines for now, waiting for a defined signal to take a directional bet.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com