Overview:
GBP/JPY is expected to consolidate in higher range after hitting three-and-a-half month low at 138.15 on Wednesday. It is underpinned by the positive risk sentiment and demand from Japan importers. But GBP/JPY gains are tempered by the Japan exporter sales. Daily chart is still negative-biased as MACD is bearish, stochastics stays suppressed at oversold zone, five-day moving average is below 15-day MA and is declining.
Trading recommendation:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As far as the price is above its pivot point, a long position is recommended with the first target at 172.35 and the second target at 172.70. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 170.60. A breach of this target will push the pair further downwards and one may expect the second target at 170.20. The pivot point is at 171.
Resistance levels:
172.35
172.70
173
Support levels:
170.60
170.20
169.65
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