GBP/JPY is expected to consolidate with a bullish bias. GBP/JPY is undermined by the soft euro sentiment and Japan’s export sales. But GBP/JPY losses are tempered by the positive investor risk appetite, demand from Japan’s importers and buoyant USD/JPY undertone. Sterling sentiment boosted by surprise rise in U.K. CIPS/Markit services PMI to 58.6 in November from October’s 56.2 (versus forecast 56.1), U.K. Treasury chief George Osborne in his Autumn Statement on U.K. economic recovery.
Daily chart is mixed as MACD and stochastics are bearish, but five and 15-day moving averages are still advancing.
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 188.35 and the second target at 188.90. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 186.90. A break of this target would push the pair further downwards and one may expect the second target at 186.25. The pivot point is at 187.35.
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