FX.co ★ Technical analysis of GBP/JPY for August 1, 2014

Overview:

GBP/JPY is expected to consolidate with bearish a bias. GBP/JPY is undermined by the increased risk aversion and Japan's export sales. But GBP/JPY losses are tempered by the demand from Japan's importers and positions adjustment before the weekend. The daily chart is still positive-biased as MACD and stochastics are in a bullish mode, five-day moving average is rising above 15-day MA.

Trading recommendations:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 172.70. A break of this target will move the pair further downwards to 172.45. The pivot point stands at 173.25. In case the price moves in the opposite direction and bounces back from the support level, then it will moves above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 173.75 and the second target at 174.20.

Resistance levels:
173.75
174.20
174.55

Support levels:
172.70
172.40
172