13.10.201415:49 Forex Analysis & Reviews: Technical analysis of GBP/JPY for October 13, 2014

Fundamental overview:

GBP/JPY is expected to consolidate with bearish bias. Weighed by broadly firmer USD undertone and sterling sales on soft GBP/JPY cross amid increased investor risk aversion. But GBP/JPY losses are tempered by the expectations that the BOE would raise interest rates in early 2015 ahead of the Federal Reserve and narrower-than-expected U.K. August global goods trade deficit of GBP 9.1 billion (versus forecast GBP 9.7 billion) and sterling demand on soft EUR/GBP cross and on buoyant GBP/AUD, GBP/NZD crosses.

Technical comment:
Daily chart is negative-biased as MACD is bearish, stochastics stays suppressed at oversold zone, five and 15-day moving averages are declining.

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. A break of this target will move the pair further downwards to 171.60. The pivot point stands at 173.60. 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 174.05 and the second target at 174.35.

Resistance levels:
174.05
174.35
175
Support levels:
172
171.60
171.25