GBP/JPY is expected to consolidate with a bullish bias. It is supported by the buoyant GBP/USD undertone and demand from Japan's importers. The sterling sentiment is boosted by the stronger-than-expected U.K. April CIPS / Markit services PMI of 59.5 (versus forecast 58.5). But GBP/JPY gains are tempered by the flows to haven yen amid increased risk aversion and Japan's export sales.
The daily chart is positive-biased as MACD is bullish, five- and 15-day moving averages are advancing, stochastics is reverted to the bullish mode 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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