GBP/JPY is expected to trade with bullish bias, undermined by the soft GBP/USD undertone. The sterling sentiment is dented by the higher-than-expected UK unemployment rate of 5.6% in the three months to May (versus forecast 5.5%), weaker-than-expected 2.8% on-year rise in average weekly earnings, excluding bonuses, in the 3 months to May (versus forecast +3.0%), and a surprise 7,000 increase in the UK June jobless claimants (versus forecast -10,000).
Technical comment:
The daily chart is mixed as the MACD is bearish, but stochastics is neutral.
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 194 and the second target at 194.70. In the alternative scenario, short positions are recommended with the first target at 191.50 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 190.65. The pivot point is at 192.35.
Resistance levels: 194 194.70 195.50
Support levels: 191.50 190.65 190
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