GBP/JPY is expected to consolidate with bearish bias after hitting a 20-month low of 127.64 on EBS Wednesday. GBP/JPY is undermined by he soft EUR/USD undertone, diminished investor risk appetite and Japan’s exports. The EUR/JPY losses are tempered by demand from the Japanese importers.
The daily chart is negative-biased as the MACD is bearish, stochastics stays suppressed at oversold levels. Five- and 15-day moving averages are declining.
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below the pivot point. Short positions are recommended with the first target at 180.15. A break of that target will move the pair further downwards to 179.50. The pivot point stands at 181.75. 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, a long position is recommended with the first target at 180.15 and the second target at 179.50.
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