Fundamental outlook:
GBP/JPY is expected to trade in a lower range. It is undermined by the soft EUR/USD undertone and Japan export sales. But GBP/JPY losses are tempered by demand from Japan importers, positive investor risk sentiment, and sterling demand amid the soft EUR/GBP cross.
Technical comment:
The daily chart is mixed as the MACD is bullish, 5 and 15-day moving averages are advancing but stochastics is turned bearish at overbought levels, bearish outside-day-range pattern was completed on Monday.
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 187.3. A break of that target will move the pair further downwards to 186.65. 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 189.75.
Resistance levels:
189.20
189.75
190.35
Support levels:
187.3
186.65
186
