Technical analysis of GBP/JPY for October 28, 2014 Market Analysis Review

Fundamental overview:

GPB/JPY is expected to consolidate in a higher range. But GBP/JPY gains are tempered by the decreased investor risk appetite. GBP/JPY is also weighed by Japan's export sales, unwinding JPY-funded carry trades amid diminished investor risk appetite as U.S. stocks closed mixed overnight (S&P 500 fell 0.15%, DJIA gained 0.07%) as a disappointing business confidence report from Germany raised concerns over the growth outlook in the eurozone.

Technical comment:

Daily chart is still positive-biased as MACD and stochastics are bullish, five-day moving average is rising above 15-day MA.

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 174.95 and the second target at 175.90. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 172.55. A break of this target would push the pair further downwards and one may expect the second target at 171.75. The pivot point is at 173.30.

Resistance levels:

174.95

175.90

176.75

Support levels:

172.55

171.75

171

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