Technical analysis of GBP/JPY for January 06, 2015 Market Analysis Review

Fundamental overview:
GBP/JPY is expected to consolidate with bearish bias. GBP/JPY is undermined by the weak GBP sentiment drop in CIPS/ Markit U.K. construction PMI to 57.6 in December from 59.4 in November, sterling sales on soft GBP/AUD, GBP/NZD and GBP/CAD crosses, and Japan exports. But GBP/JPY losses are tempered by demand from Japan importers.

Technical comment:
Daily chart is negative-biased as MACD and slow stochastic indicators bearish, although the latter is at oversold levels, five and 15-day moving averages are declining.

Trading recommendations:

The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below the pivot point. Short positions are recommended with the first target at 181.35. A break of this target will move the pair further downward to 180.30. The pivot point stands at 183.65. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, a long position is recommended with the first target at 185 and the second target at 185.70.

Resistance levels:

185

185.70

186.50

Support levels:

181.35

180.30

179.75

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