Overview:

GBP/JPY is expected to trade in a range. It is undermined by the increased risk aversion and Japanese export sales. But downside move of GBP/JPY is limited by the buoyant USD/JPY undertone and demand from Japanese importers. The daily chart is mixed as MACD is bearish, five-day moving average is below a 15-day MA which is declining. However, stochastics is turned bullish to the oversold zone. Inside-day-range pattern was completed on Monday.

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 173.55 and the second target at 174.10. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 172.35. A break of this target would push the pair further downwards and one may expect the second target at 171.90. The pivot point is at 172.70.

Resistance levels:
173.55
174.10
174.55

Support levels:
172.35
171.90
171.65