GBP/JPY is expected to trade with bearish bias. The pair has started the week with a bearish gap, and is likely to post further decline. The downward momentum is further reinforced by its descending 20-period moving average, which maintains the strong selling pressure. Besides, the relative strength index lacks upward momentum. On Sunday, British Prime Minister Theresa May said she would trigger the process for the U.K. to leave the European Union by the end of March. To sum up, as long as the resistance at 131.95 is not surpassed, the pair is likely to drop to 130.70 at first, and even to 130.20 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 130.70. A break below this target will move the pair further downwards to 130.20. The pivot point stands at 131.95. 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 132.45 and the second one, at 132.80.
Resistance levels: 132.45, 132.80, 133.65
Support levels: 130.70, 130.20, 129.65
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