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GBP/JPY is under pressure. The pair is consolidating on the downside below its key resistance at 138, which should limit the upside potential. The downward momentum is further reinforced by declining 20-period and 50-period moving averages, which play resistance role and maintain the downside bias. Additionally, the 20-period moving average just crossed below the 50-period one. The relative strength index is below its neutrality level at 50 and lacks upward momentum. As long as 138 holds on the upside, look for a further drop toward 136.60 and even 136 in extension.

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 136.60. A break below this target will move the pair further downwards to 135.00. The pivot point stands at 138.00. If the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 138.45 and the second one at 139.00.

Resistance levels: 138.45, 139.00, 139.75

Support levels: 136.60, 136, 135.30

The material has been provided by InstaForex Company – www.instaforex.com
Source: Instaforex.com

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