GBP/JPY is under pressure. The pair has been capped by both 20-period and 50-period moving averages, while the relative strength index stays below 50. As expected the Bank of England announced its decision to keep its key interest rate unchanged at 0.25% and to maintain its bond-buying programs. Meanwhile, the latest minutes of the BoE Monetary Policy Committee pointed out that a majority of officials are likely to cut the key rate later this year if their next set of forecasts, due November, will paint a picture of the economy that is broadly consistent with August's projections. As long as 135.60 holds as the key resistance, a drop toward 134.50 is possible.
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 134.50. A break below this target will move the pair further downwards to 133.95. The pivot point stands at 135.60. 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 136.10 and the second one, at 136.65.
Resistance levels: 36.10, 136.65, 137.10
Support levels: 134.50, 133.95, 133.00
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