GBP/JPY is expected to trade with a bearish bias as the movement is capped by a negative trend line. The technical picture of the pair is negative below a declining trend line (since Sep 2), which confirms a bearish view. The relative strength index is below its neutrality level at 50. Additionally, 136.85 is playing a key resistance role, which should limit the upside potential. As long as 136.85 holds on the upside, the pair is likely to return to its previous low at 135.35. A break below this level would call for a further drop toward 134.50.
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 136.85. 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 137.35 and the second one, at 138.35.
Resistance levels: 137.35, 138.35, 138.80
Support levels: 135.35, 134.50, 133.65
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