GBP/JPY is expected to trade in a lower range. The technical picture of the pair remains bearish. The pair is trading below its declining 50-period moving average, which acts as a resistance role and maintains the downside bias. The relative strength index is below its neutrality level at 50. Additionally, 134.05 is playing a key resistance role, which should limit the upside potential. Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited. As long as 134.05 holds on the upside, the pair is likely to return to the previous low at 132.35. A break below this level would call for a further decline toward 131.90.
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 132.35. A break below this target will move the pair further downwards to 131.90. The pivot point stands at 134.05. 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 134.60 and the second one, at 135.20.
Resistance levels: 134.60, 135.20, 136.65
Support levels: 132.35, 131.90, 131
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