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The British Pound may be readying to turn higher against the Japanese Yen after prices put in a Bullish Engulfing candlestick pattern above support at a rising trend line set from August 2013. Initial resistance is at 171.27, the 23.6% Fibonacci expansion, with a break above that targeting the 38.2% level at 172.05. Trend line support is now at 170.14.
Prices are too close to relevant resistance to justify a long position from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal argues against taking up the short side. We will remain flat for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com