Fundamental Overview:
GBP/JPY is expected to consolidate with a bearish bias. The pound sterling is hurt by jitters over increased prospects of Scottish independence after a YouGov survey Saturday showed 47% of respondents said "yes" to independence, while 45% said "no"-- the first time supporters of Scottish independence have taken the lead since the referendum campaign began. Analysts say a vote for Scottish independence on Sept. 18 could have serious repercussions for both the Scottish and U.K. economy, having the potential to cause chaos in financial markets as it brings uncertainty on issues including currency, tax and trade regulations and weaker USD/JPY undertone as well as Japan export sales. But GBP/JPY downside is limited by the demand from Japanese importers.
Technical Comment:
The daily chart is negative-biased as MACD and stochastics are bearish.
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 its pivot point. Short position is recommended with the first target at 169.25. A break of this target will move the pair further downwards to 168.55. The pivot point stands at 170.90. In case the price moves in the opposite direction and bounces back from the support level, then it will moves above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 171.75 and the second target at 172.35.
Resistance levels:
171.75
172.35
172.75
Support levels:
169.25
168.55
168.15
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