GBP/JPY is expected to consolidate with bullish bias. GBP/JPY upside is limited by the weak pound sentiment and Japan’s exports. The sterling sentiment is dented by a softer-than-expected monthly rise of 0.2% and yearly fall of 0.1% in the UK April CPI (versus forecast +0.4% on month, +0.0% on year). But GBP/JPY losses are tempered by the demand from the Japanese importers.
The daily chart is negative-biased as stochastics is falling from overbought levels. The MACD is staging bearish crossover against its exponential moving average; bearish parabolic stop-and-reverse signal was hit on Tuesday.
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 187.95 and the second target at 188.60. In the alternative scenario, short positions are recommended with the first target at 185.95 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 185.35. The pivot point is at 186.65.
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