GBP/JPY is expected to trade with a bearish bias as the pair is capped by a negative trend line. The technical picture is negative below a declining trend line, which emerged on Sep 2. The downward momentum is further reinforced by its descending 50-period moving average, which acts as resistance and maintains the downside bias. The RSI is below its neutrality level at 50 and lacks upward momentum. Below 136.80, look for a further drop toward 135.35 and even 134.50 in extension.
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 135.35. A break below this target will move the pair further downwards to 134.50. The pivot point stands at 136.80. 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 138.35 and the second one, at 138.80.
Resistance levels: 138.35, 138.80, 139.55
Support levels: 135.35, 134.50, 133.65
The material has been provided by InstaForex Company - www.instaforex.com