Fundamental overview:
GBP/JPY is expected to consolidate with bearish bias. It is undermined by the increased aversion to investor risks ahead of the next month's UK general election and sterling sales on buoyant EUR/GBP cross. But sterling sentiment is soothed after the UK unemployment rate came in at 5.6% in the three months to February, the lowest since mid-2008. Although, UK jobless claimants fell fewer-than-expected 20,000 in March (versus forecast -30,000) and average weekly earnings rose less-than-expected to +1.7% on-year (versus forecast +1.8% on-year) in the three months to February. But GBP/JPY downside is limited by demand from Japan importers.
Technical comment:
The daily chart is tilting positive as stochastics is in bullish mode, the MACD is turning bullish.
Trading recommendations:
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 176.50. A break of that target will move the pair further downwards to 176.05. The pivot point stands at 177.80. In case 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 178.40 and the second target at 179.10.
Resistance levels:
178.40
179.10
179.65
Support levels:
176.50
176.05
175.45
