Daily Forex Technical Analysis: GBP/JPY Testing Support at ¥172.20

GBP/JPY (172.560)

The Sterling has been pulling back versus the yen. This was expected and we are now testing support near ¥172.20. If we have a move, and daily close, below the congestion area that runs from ¥172.65 to ¥172.40, we will then test ¥171.85/80 and lower.

An alternative view, a push back above ¥173 tests ¥173.30. A close above the latter level tests ¥174/174.05.

A bit of strategy here, do not enter shorts when close to a support level. From a risk and reward perspective, this strategy, at this time, is not worth it. On the other hand taking up a long position without any clear signs of a bullish reversal is also a bit early. Maybe waiting and seeing in the market is the best course of action.

USD/CHF (0.91771)

The dollar has pushed higher here after the formation of an engulfing hammer on our chart (see below). Right now we have resistance lining up at 0.9220. A close above this level tests 0.9270 then 0.9275.

A push back lower, a reversal, sees a support level at 0.9180. A close below this level can test 0.9175 then the key technical level at 0.9110. Before 0.9110 we have 0.9115.