Fundamental overview:
GBP/JPY is expected to consolidate. It is supported by the positive risk sentiment and demand from Japan's importers. But GBP/JPY gains upside are limited by the Japanese export sales, soft EUR/USD undertone and positions adjustment before weekend. GBP sentiment is boosted by stronger than expected 1.6% on month and 6.4% on year increase in the U.K. November retail sales (versus forecast +0.4% on month, +4.5% on year).
Technical comment:
The daily chart is mixed as the MACD is bearish, five-day moving average is below 15-day moving average and is declining but stochastics turning bullish at oversold levels, inside day range pattern was completed on Thursday.
Trading recommendations:
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 187.70 and the second target at 188.45. In an alternative scenario, if the price moves below its pivot points, short posisitions are recommended with the first target at 184.35. A break of this target would push the pair further downward and one may expect the second target at 183. The pivot point is at 185.20.
Resistance levels:
187.70
188.45
189.35
Support levels:
184.35
183
182.5
