GBP/JPY is expected to trade with a bullish bias as the movement is supported by a rising trend line. The technical picture of the pair remains positive above a rising trend line, which emerged on Aug 26. The upward momentum is further reinforced by its ascending 20-period and 50-period moving averages. A support base has been formed around 135.35, which should limit the downside potential. As long as 135.5 holds on the downside, look for a further upside toward 138.05. A break above 138.05 would call for a further advance toward 138.70.
The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 138.05 and the second one at 138.70. In the alternative scenario, short positions are recommended with the first target at 134.85 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 134.40. The pivot point is at 135.35.
Resistance levels: 138.05, 138.70, 139.50
Support levels: 134.85, 134.40, 133.90
The material has been provided by InstaForex Company - www.instaforex.com