GBP/JPY is expected to consolidate with a bullish bias. It is supported by the buoyant GBP/USD undertone. But an upward move of GBP/JPY is limited by flows to haven yen amid increased risk aversion and sell-euro orders from Japan's exporters. However, the sterling sentiment is dented by the worse-than-expected drop in U.K. CIPS / Markit construction PMI to 54.2 in April from March's 57.8 (versus forecast 57.5). GBP/JPY upward move is also hampered by uncertainty over outcome of Thursday's U.K. general election, increased risk aversion, and sterling sales on the buoyant EUR/GBP cross.
The daily chart is mixed as MACD is bullish, 5 and 15-day moving averages are advancing but stochastics is bearish at overbought levels.
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 182.80 and the second target at 183.45. In the alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 180.75. A break of this target is likely to push the pair further downwards, and one may expect the second target at 180.25. The pivot point is at 181.40.
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