Fundamental Overview:
GBP/JPY is expected to consolidate with a bullish bias. It is undermined by the soft EUR sentiment, Japanese export sales and by jitters over the Scottish independence referendum on Thursday and waning investor risk appetite. But JPY/JPY losses are tempered by the demand from Japanese importers.
Technical Comment:
The daily chart is mixed as MACD is bullish, five-day moving average is above 15-day MA and is advancing, but stochastics is turning bearish at overbought zone, inside-day-range pattern was completed on Monday.
Trading recommendations:
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 long as the price is keeping above its pivot point, a long position is recommended with the first target at 174.70 and the second target at 175.40. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 172.60. A break of this target would push the pair further downwards and one may expect the second target at 172. The pivot point is at 173.30.
Resistance levels:
174.70
175.40
176
Support levels:
172.60
172
171.45
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