GBP/JPY is expected to trade in a lower range. It is supported by the buoyant EUR/USD undertone and demand from Japan's importers. The GBP/JPY gains are tempered by the decreased investor risk appetite and the Japanese exports. The sterling sentiment is dented by a worse-than-expected drop in the UK March CBI industrial order book balance to zero in June from +10 in May (versus forecast of +9). The GBP/USD gains are also tempered by the waning investor risk appetite and sterling sales on the buoyant EUR/GBP cross.
Technical comment:
The daily chart is positive-biased as the MACD and stochastics are bullish, 5-day moving average is rising above 15-day 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 192.25. A break of that target will move the pair further downwards to 191.80. The pivot point stands at 193.30. 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 194 and the second target at 194.35.
Resistance levels: 194 194.35 194.70
Support levels: 192.25 191.80 191
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