GBP/JPY is expected to continue its downside movement. The technical picture of GBP/JPY is negative. The pair recorded a succession of lower tops and lower bottoms since Oct 14 and is consolidating on the downside. The downward momentum is further reinforced by its declining 20-period and 50-period moving averages, which play resistance roles and maintain the downside bias. The relative strength index is bearish below its neutrality level at 50 and calls for further downside. To conclude as long as 127.80 holds on the upside, look for a further drop toward 125.90 and 124.80 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 125.90. A break below this target will move the pair further downwards to 124.80. The pivot point stands at 127.80. 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 128.70 and the second one at 130.00.
Resistance levels: 128.70, 130.00, 131.00
Support levels: 125.90, 124.80, 123.40
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