GBP/JPY is under pressure and expected to go further downward. European stocks encountered resistance after rallying for four sessions in a row, with the Stoxx Europe 600 declining 0.7%. The pair is moving sideways below its key resistance at 136.30, while the relative strength index is around 50 and lacks upward momentum. As long as 136.30 holds as the key resistance, a drop toward 134.20 is possible.
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 135.00. A break below this target will move the pair further downwards to 134.20. The pivot point stands at 136.30. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 136.85 and the second one, at 137.70.
Resistance levels: 136.85, 137.70, 138.70
Support levels: 135, 134.20, 133.30