GBP/JPY is expected to consolidate with bullish bias. It is supported by the buoyant GBP/USD undertone. Upside, GBP/JPY is limited by the flows to haven yen amid increased risk aversion and sell-euro orders from Japan exporters. But sterling sentiment is dented by the worse-than-expected drop in UK CIPS / Markit construction PMI to 54.2 in April from 57.8 in March (versus forecast 57.5). GBP/JPY is also limited by the uncertainty over the outcome of Thursday’s UK general election, increased risk aversion, and sterling sales on buoyant EUR/GBP cross.`
The aily chart is mixed as the 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 189.20 and the second target at 189.75. In the alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 184.55. A break of this target is likely to push the pair further downwards, and one may expect the second target at 183.80. The pivot point is at 186.
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