GBP/JPY is expected to consolidate after hitting a six-day high 148.14 on Monday. It is undermined by the reduced investor risk tolerance and Japan’s export sales. Sterling sentiment boosted by surprise rise in U.K. CIPS/Markit manufacturing PMI to 53.5 in November from 53.2 in October (versus forecast 52.8). But GBP/JPY downside is limited by the demand from Japan’s importers.
Daily chart is mixed as stochastics bullish near overbought levels, five and 15-day moving averages are advancing, but MACD is bearish.
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 187 and the second target at 187.70. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 185.25. A break of this target would push the pair further downwards and one may expect the second target at 184.70. The pivot point is at 185.90.
The material has been provided by InstaForex Company – www.instaforex.com