GBP/JPY is expected to trade with a bullish bias above 113.85. The pair is trading below its 20-period and 50-period moving averages while the relative strength index is below its neutrality level at 50. Nevertheless, 113.80 (Aug 17, 19 and 22 tops) represents a significant key support level, which should limit the downside potential. As long as this key support is not broken, look for a technical rebound toward 134.50. A break above this level would call for further advance toward 135.25.
The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 134.50 and the second one, at 135.25. In the alternative scenario, short positions are recommended with the first target at 132.35 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 131.90. The pivot point is at 132.85.
Resistance levels: 134.50, 135.25, 136.15
Support levels: 132.35, 131.90, 131.25
