Overview:
GBP/JPY is trading with risks skewed higher. The rate is underpinned by yen-funded carry trades amid positive investor risk sentiment (VIX fear gauge eased 8.79% to 14.01and S&P rose 0.46% overnight) as fresh assurance of central bank support helped to dispel worries that tighter China's policies to cool its housing market may hurt global recovery and also by positive investor risk appetite; expectations of more quantitative easing from BOJ in coming months to achieve 2% inflation target; demand from Japan importers. But GBP/JPY gains tempered by Japan exporter sales.
Recommendation:
Buy above 140.15 with targets first target in sight at 141.5 and second target at 142 in extension of first target.
Resistance levels:
R1 - 141.5
R2 - 142
R3 - 142.6
Alternative scenario:
Sell below pivot point of 140.15 and look for further downside with first target at 139.75 and second target at 139.1.
Support levels:
S1 - 139.75
S2 - 139.1
S3 - 138.75
Technical comment:
Daily chart is mixed as MACD is bearish; but stochastics is rising from oversold; inside-day-range pattern was completed on Monday.
