GBP/JPY is expected to trade in a higher range. It is underpinned by the improved EUR sentiment after reports that Greece will ask for a loan-agreement extension on Wednesday, receding risk aversion and demand from Japan's importers. But GBP/JPY gains are tempered by Japan's export sales. The sterling sentiment is dented by drop in U.K. annual CPI to more-than-50-year low of 0.3% in January from 0.5% in December (in line with the forecast).
The daily chart is mixed as bullish outside-day-range pattern was completed on Tuesday, MACD is bullish but stochastics is bearish near overbought levels.
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 183.65 and the second target at 184.20. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 181.25. A break of this target would push the pair further downwards, and one may expect the second target at 180.90. The pivot point is at 182.
Uitgevoerd door, Analytische expert
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