Fundamental outlook: GBP/JPY is expected to consolidate with bullish bias. It is underpinned by improved euro sentiment and demand from Japanese importers. Sterling sentiment is boosted by the stronger-than-expected UK May CIPS / Markit construction PMI of 55.9 (versus forecast 55.0). But GBP/JPY gains are tempered by Japan's exports.
Technical comment: The daily chart is positive-biased as the MACD and stochastics are bullish. The latter is at overbought levels, five-day moving average is above 15-day moving average and is advancing.
Trading recommendations: The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. As long as the price holds above its pivot point, long positions are recommended with the first target at 190.70 and the second target at 191.20. In the alternative scenario, short positions are recommended with the first target at 189.10 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 188.60. The pivot point is at 189.65.
Resistance levels: 190.70 191.20 191.75
Support levels: 189.10 188.60 187.80
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