Fundamental Overview:

GBP/JPY is expected to consolidate with a bullish bias before FOMC decision. It is supported by the positive investor risk sentiment and demand from Japanese importers. But GBP/JPY gains are tempered by Japanese export sales But GBP sentiment is also dented by the lower-than-expected U.K. August CPI of +1.5% on-year (versus forecast +1.6%). GBP/USD gains are also tempered by the uncertainty over the Scottish independence referendum on Thursday.

Technical Comment:
The daily chart is mixed as MACD is bullish, five-day moving average is above 15-day MA and is advancing, but stochastics is turned bearish at the overbought zone; inside-day-range pattern was completed on Tuesday.

Trading recommendations:
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 175.90 and the second target at 176.40. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 173.75. A break of this target would push the pair further downwards and one may expect the second target at 172.95. The pivot point is at 174.45.

Resistance levels:
175.90
176.40
176.95
Support levels:
173.75
172.95
172.60