FX.co ★ Technical analysis of GBP/JPY for April 24, 2015

Fundamental overview:

GBP/JPY is expected to trade in a higher range. It is undermined by less-dovish-than-expected minutes for the Bank of England MPC's meeting in April and positive investor risk appetite. But sterling sentiment is dented by a surprising 0.5% on-month drop in the UK retail sales in March (versus forecast +0.4% on-month), buoyant GBP/USD undertone, and demand from Japan importers. But GBP/JPY gains are tempered by the Japan export sales and positions adjustment ahead of the weekend.

Technical comment:
The daily chart is positive-biased as the MACD and stochastic are in bullish mode, bullish outside-day-range pattern was completed on Thursday, and five-day moving average is rising above 15-day moving average.

Trading recommendations:
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 181.20 and the second target at 181.80. In the alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 178.90. A break of this target is likely to push the pair further downwards, and one may expect the second target at 178.45. The pivot point is at 179.30.

Resistance levels:
181.20
181.80
182.45
Support levels:
178.90
178.45
178