GBO/JPY is expected to trade with a bullish bias. It is supported by the positive risk sentiment and demand from Japanese importers. GBP/JPY is underpinned by the report that Japan’s $1.2 trillion Government Pension Investment Fund plans to lower its target allocation for domestic bonds from nearly 60% now to 35% (versus market expectations of reduction to 40%) over the medium to long term. But GBP/JPY gains are tempered by Japan’s export sales and positions adjustment before the weekend.
Daily chart is positive-biased as MACD and stochastics are bullish, although latter is at overbought zone, five-day moving average is above 15-day MA and is 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 179.75 and the second target at 180.70. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 175.15. A break of this target would push the pair further downwards and one may expect the second target at 173.90. The pivot point is at 175.90.
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