Fundamental overview:
GGBP/JPY is expected to consolidate with bearish bias. It is undermined by weak euro sentiment, flows to haven the yen amid increased investor risk aversion, and Japan exporter sales. But GBP/JPY losses are tempered by the demand from Japan importers. Sterling sentiment is boosted by ICM opinion poll for The Guardian newspaper showing ruling Conservative Party ahead of Labour party.
Technical comment:
The daily chart is negative-biased as the MACD and stochastics are bearish, although the latter is at oversold levels, five-day moving average is below 15-day moving average and is declining.
Trading recommendations:
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 174.80. A break of that target is likely to underpin the pair further downwards to 173.90.The pivot point is at 176.55. In case the price moves in the opposite direction and bounces back from the support level, it will get above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 177.05 and the second target at 177.50.
Resistance levels:
177.05
177.50
178.05
Support levels:
174.80
173.90
173.15
