GBP/JPY is expected to prevail its upside movement. The pair remains on the upside, and is looking for a higher top. The configuration is positive as the 20-period moving average still stays above the 50-period one, and the relative strength index is above 50. In Britain, the third-quarter GDP growth was reported as +0.5% on quarter, compared with +0.3% expected and +0.7% in the previous quarter. Even so, the across-the-board strength of the U.S. dollar over-powered the British pound causing GBP/USD to decline 0.7% to 1.2161.
As long as 127.35 is not broken down, further bounce is preferred with 128.50 and 128.85 as targets.
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 128.50 and the second one at 128.85. In the alternative scenario, short positions are recommended with the first target at 127.00 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 126.60. The pivot point lies at 127.35.
Resistance levels: 128.50, 128.85, 129.45
Support levels: 127.00, 126.60, 126.10
The material has been provided by InstaForex Company – www.instaforex.com
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