Fundamental outlook: GBP/JPY is expected to consolidate with bullish bias after hitting a two-week high of 136.47 on Friday. It is underpinned by demand from Japanese importers. Upside, GBP/JPY is limited by diminished investor risk appetite and Japan's exports.
Technical comment: The daily chart is positive-biased as bullish outside-day-range pattern was completed on Monday. Stochastic is bullish, the MACD histogram bars are turning positive, and five-day moving average is above 15-day moving average and is advancing.
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. As long as the price holds above its pivot point, long positions are recommended with the first target at 190.60 and the second target at 191.20. In the alternative scenario, short positions are recommended with the first target at 188.60 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 187.80. The pivot point is at 189.25.
Resistance levels: 190.60 191.20 191.75
Support levels: 188.60 187.80 187
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