Fundamental overview:
GBP/JPY is expected to trade in a higher range. It is supported by the improved euro sentiment as worries over Greece diminish receding investor risk aversion and by the demand from Japan's importers. The GBP sentiment is boosted by a rise in the CIPS / Markit U.K. manufacturing PMI to 53.0 in January (versus forecast 52.6) from revised 52.7 in December (originally reported as 52.5). But the GBP/JPY gains are tempered by the Japanese exporter sales.
Technical comment:
The daily chart is tilting positive as stochastics is rising from oversold levels, the MACD is staging bullish crossover against its exponential moving average.
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 175.50. A break of this target will move the pair further downward to 175. The pivot point stands at 177.10. 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 177.70 and the second target at 178.55.
Resistance levels:
177.70
178.55
179.
Support levels:
175.50
175
174.25
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