Fundamental outlook:
GBP/JPY is expected to trade in a range. It is supported by demand from Japan importers. But GBP/JPY upside is limited by the Japan export sales and decreased investor risk appetite. Sterling sentiment is boosted by the stronger-than-expected 0.5% on-month, 0.7% on-year increase in the UK March industrial production (versus forecast +0.1% on-month, +0.1% on-year).
Technical comment:
The daily chart is mixed as the MACD is bullish, but stochastics is bearish at overbought levels.
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 189.20 and the second target at 189.75. In the alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 186.65. A break of this target is likely to push the pair further downwards, and one may expect the second target at 186. The pivot point is at 187.40.
Resistance levels:
189.20
189.75
190.35
Support levels:
186.65
186
185.25
