Technical analysis of GBP/JPY for January 10, 2015 Market Analysis Review

Fundamental overview:
GBP/JPY is expected to trade in a lower range. It is undermined by the flows to haven yen amid weaker investor risk appetite, narrower-than-expected U.K. November global goods trade deficit of GBP8.8 billion (versus forecast GBP9.5 billion). But GBP/JPY gains are tempered by sterling sales on soft EUR/GBP cross amid waning investor risk appetite.

Technical comment:
Daily chart is negative-biased as MACD is bearish, stochastics stays suppressed 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 178.20. A break of this target will move the pair further downward to 177.10. The pivot point stands at 181. 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 181.70 and the second target at 182.70.

Resistance levels:

181.70

182.70

183.65

Support levels:

178.20

177.10

176.75

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