GBP/JPY is expected to consolidate with bullish bias. The cross is supported by the diminished investor risk aversion and demand from Japan’s importers. The GBP/JPY upside is limited by the Japanese exports. The sterling sentiment is boosted after Bank of England’s Broadbent said that the chances of a deflation in the UK are slim, while Bank of England Governor Carney said the “central view” of the Monetary Policy Committee is that the next move in the interest rates is going to be a hike.
The daily chart is mixed as the MACD is bullish, but stochastics is neutral.
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 178.30 and the second target at 178.90. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 176. A break of this target would push the pair further downwards, and one may expect the second target at 175.45. The pivot point is at 176.55.
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