GBP/JPY is expected to trade with bullish bias above 131.90. The pair is consolidating and is trading below its 20-period and 50-period moving averages. The 20-period moving average is turning down while the relative strength index is below its neutrality level at 50. Nevertheless, 131.90 represents a significant key support level, which should limit the downside potential. As long as this key level is not broken, look for a further upside toward 134.05. A break above this level would call for a further advance toward 134.60.
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 134.05 and the second one at 134.60. In the alternative scenario, short positions are recommended with the first target at 131.35 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 130.90. The pivot point is at 131.90.
Resistance levels: 134.05, 134.60, 135.20
Support levels: 131.35, 130.90, 130
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