GBP/JPY is expected to trade with bullish bias as the key support lies at 135.90. The pair is trading below its 20-period and 50-period moving averages, which play resistance roles, while the 20-period moving average crossed below the 50-period one. The relative strength index is below its neutrality level at 50 and lacks upward momentum. Nevertheless, 135.90 represents a significant key support level, which should limit the downside potential. As long as this key level is not broken, we keep our positive view unchanged with up target at 137.85 first. A break above this level would call for a further advance toward 138.50.
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 137.85 and the second one at 138.50. In the alternative scenario, short positions are recommended with the first target at 134.95 if the price moves below its pivot point. A break of this target is likely to push the pair further downwards, and one may expect the second target at 134.15. The pivot point lies at 135.90.
Resistance levels: 137.85, 138.50, 139.25
Support levels: 134.95, 134.15, 133.40
The material has been provided by InstaForex Company - www.instaforex.com