Overview:
GBP/JPY is expected to consolidate with bearish bias. It is undermined by the increased investor risk aversion and Japan exporter sales. But GBP/JPY losses are tempered by the demand from Japan importers. Daily chart is negative-biased as bearish outside-day-range pattern was completed on Tuesday, MACD is bearish and stochastics stays suppressed at oversold zone, five-day moving average is below 15-day MA and declining.
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 170. A breach of this target will move the pair further downwards to 169.65. The pivot point stands at 171.10. In case the price moves in the opposite direction and bounces back from support level, and then it 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 171.80 and the second target at 172.35.
Resistance levels:
171.80
172.35
172.85
Support levels:
170
169.65
169.25
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