GBP/JPY is under pressure and expected to trade in a lower range. On Tuesday, U.S. stocks halted their recent winning streak, which spanned the prior four sessions as fears that Britain's exit from the European Union would drag global growth resurfaced. European stocks were broadly weaker, with the Stoxx Europe 600 declining 1.7%. However, the U.K. FTSE 100 gained 0.4%. The pair was capped by its descending 20-period moving average and is accelerating on the downside, while the relative strength index is badly directed. As long as 131.60 holds as the key resistance, a drop towards 128.75 is possible.
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 128.75. A break below this target will move the pair further downwards to 127.00. The pivot point stands at 1131.60. 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 132.60 and the second one, at 134.15.
Resistance levels: 132.60 , 134.15, 136.85
Support levels: 128.75 , 127.00 , 126.15
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