GBP/JPY is expected to continue its upside movement as the bias remains bullish. The pair broke above its declining 50-period moving average, and is staying on the upside. The upward momentum is further reinforced by a bullish signal identified from relative strength index. The indicator stays above 50, and lacks downward momentum. GBP/USD rose 0.6% to 1.2488 (an intraday-high at 1.2525), boosted by strong credit growth data in the U.K. The Bank of England reported that consumer credit grew 10.5% on year in October, the fastest rate since October 2005. Mortgage approvals for house purchases increased to 67,518 in October (vs. 65,000 expected) from 63,594 in September.
To sum up, as long as 139.70 is support, look for a new rise toward 141.40 and 141.75 in extension.
The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 141.40 and the second one at 141.75. In the alternative scenario, short positions are recommended with the first target at 139.25 if the price moves below its pivot point. A break of this target is likely to push the pair further downwards, and one may expect the second target at 138.50. The pivot point lies at 139.70.
Resistance levels: 141.40, 141.75, 143.25
Support levels: 139.25, 138.50, 138.00
The material has been provided by InstaForex Company – www.instaforex.com
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