GBP/JPY is expected to extend further gains. The pair broke above its 50-period moving average and is holding on the upside. The rising 20-period and 50-period moving averages maintain the upside bias. A strong support base has formed at 131.25 and the downward potential should be limited by this level. The relative strength index is above its neutrality area at 50. As long as 131.25 is holding as support, call for further advance to 132.55 and 133.20 in extension.
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. Therefore, long positions are recommended with the first target at 132.55 and the second one, at 133.20. In the alternative scenario, short positions are recommended with the first target at 130.90 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 130.25. The pivot point is at 131.25.
Resistance levels: 132.55, 133.20 , 134.60
Support levels: 130.90, 130.25, 129.20
The material has been provided by InstaForex Company - www.instaforex.com