18.12.201404:55 Forex Analysis & Reviews: Technical analysis of GBP/JPY for December 18, 2014

Fundamental overview:
GBP/JPY is expected to trade in a higher range. It is supported by the positive risk sentiment and demand from Japan's importers. But GBP/JPY gains are tempered by Japan's export sales. The sterling sentiment is soothed by stronger-than-expected 1.6% rise in U.K. average earnings in the quarter ending in October (versus forecast +1.5% and higher than the U.K. October CPI of 1.3%) as well as bigger-than-expected 26,900 drop in U.K. November jobless claimants (versus forecast -20,000), although U.K. unemployment rate in the three months to October was higher-than-expected at 6.0% (versus forecast 5.9%).

Technical comment:
Daily chart is mixed as MACD is bearish, but stochastics is turning bullish at oversold levels, inside-day-range pattern was completed on Wednesday.

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 186.30 and the second target at 187.70. In an alternative scenario, if the price moves below its pivot points, short posisitions are recommended with the first target at 182.05. A break of this target would push the pair further downwards and one may expect the second target at 181.15. The pivot point is at 183.

Resistance levels:
186.30
187.70
188.25

Support levels:
182.05
181.15
180