Fundamental overview:
GBP/JPY is expected to trade with bearish bias.Bank of England on Thursday left its benchmark rate at 0.5% and maintained the total size of its bond portfolio at GBP375 billion as widely expected.It is weighed by the soft USD/JPY and EUR/USD undertone and Japan exporter sales. But GBP/JPY losses are tempered by the demand from Japan importers and by expectations that BOE would raise interest rates in early 2015 and positions adjustment before Japan long weekend.
Technical comment:
Daily chart is negative-biased as MACD is bearish, stochastics stays suppressed at oversold zone, five and 15-day moving averages are declining, although inside-day-range pattern was completed on Thursday.
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 172.55. A break of this target will move the pair further downwards to 172. The pivot point stands at 174.05. 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 174.35 and the second target at 175.
Resistance levels:
174.35
175
175.45
Support levels:
172.55
172
171.65
