GBP/JPY is expected to continue its rebound. The pair recorded a succession of higher tops and higher bottoms, which confirms a positive view. The rising 20-period and 50-period moving averages are playing support roles and should push the prices higher. A support base at 130.30 has been formed and should limit the downside potential. In addition, the relative strength index is bullish above its neutrality level at 50 and lacks downward momentum. As long as 130.30 holds on the downside, look for a further upside toward 131.35 and even 131.95 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 131.35 and the second one at 131.95. In the alternative scenario, short positions are recommended with the first target at 129.95 if the price moves below its pivot point. A break of this target is likely to push the pair further downwards, and one may expect the second target at 129.65. The pivot point lies at 130.30.
Resistance levels: 131.35, 131.95, 132.45
Support levels: 130.05, 129.65, 129.10
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