GBP/JPY is under pressure and expected to trade in lower range. The pair recorded a succession of lower tops and lower bottoms, which confirms a negative view. Additionally, the declining 50-period moving average is playing a resistance role and maintains the downside bias. The relative strength index is capped by a bearish trend line. Furthermore, 131.95 is playing a key resistance role, which should limit the upside potential. As long as this key level holds on the upside, look for further drop toward 128.75 and 128 in extension.
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 128. The pivot point stands at 131.95. 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 133.40.
Resistance levels: 131.50, 132.60 , 134.15
Support levels: 128.75 , 128.00, 127.00
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