Fundamental Overview:
GBP/JPY is expected to consolidate with bearish bias as markets await U.S. non-farm payrolls report. GBP/JPY is supported by the firmer EUR/USD; demand from Japan importers. But GBP/JPY upside limited by soft USD/JPY undertone and by stronger-than-expected CIPS / Markit U.K. September construction PMI of 64.2 (versus forecast 63.3). GBP/JPY losses also tempered by positions adjustment before weekend. Japan exporter sales.
Technical Comment:
Daily chart is negative-biased as MACD and stochastics are bearish, although latter is at oversold zone, five-day moving average is below 15-day MA and is declining.
Trading recommendations:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 174.50. A break of this target will move the pair further downwards to 174. The pivot point stands at 176.00. In case the price moves in the opposite direction and bounces back from the support level, then it will moves above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 176.65 and the second target at 177.10.
Resistance levels:
176.65
177.10
177.45
Support levels:
174.50
174
173.65
