Fundamental Overview:
GBP/JPY is expected to trade with the bearish bias. It is undermined by the stronger yen sentiment and Japan exporter sales, it is supported by the sterling sales on soft GBP/JPY cross amid stronger yen sentiment and increased investor risk aversion; the sterling sales on soft GBP/AUD and GBP/CHF crosses, and on buoyant EUR/GBP cross. U.K. data were mixed Tuesday as weaker-than-expected 2.5% on-year rise in U.K. August industrial production (versus forecast +2.6%) offset stronger-than-expected 3.9% on-year increase in U.K. August manufacturing output (versus forecast +3.4%) . But GBP/JPY losses are tempered by the demand from Japan importers.
Technical Comment:
Daily chart is negative-biased as MACD is bearish, stochastics stays suppressed at oversold zone, five-day moving average is below 15-day MA and is declining.
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 173.50. A break of this target will move the pair further downwards to 172.95. The pivot point stands at 174.50. 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 175.15 and the second target at 176.
Resistance levels:
175.15
176
176.65
Support levels:
173.50
172.95
172.50
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