Fundamental outlook:
GBP/JPY is expected to trade in a lower range. This movement is supported by the 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 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 below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 186.65. A break of that target will move the pair further downwards to 186. The pivot point stands at 188.60. 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, long positions are recommended with the first target at 189.20 and the second target at 189375.
Resistance levels:
189.20
189.75
190.35
Support levels:
186.65
186
185.25
