Overview:
The GBP/JPY is expected to trade in lower range.It is undermined by the increased investor risk aversion and weaker euro sentiment after euro-negative comments from ECB President Draghi and Japan exporter sales. But the EUR/JPY losses are tempered by the demand from Japan importers and loose BOJ's monetary policy and positions adjustment before weekend. Daily chart is negative-biased as bearish outside-day-range pattern was completed on Thursday, stochastics is falling from overbought zone, positive MACD histogram bars are contracting.
Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 167.70. A breach of this target will move the pair further downwards to 167.10. The pivot point stands at 169.40. In case the price moves in the opposite direction and bounces back from support level, and then moves above its pivot point, it is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 170 and the second target at 170.5.
Resistance levels:
170
170.50
171.10
Support levels:
167.70
167.10
166.20
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