GBP/JPY is under pressure as the key resistance is at 138.30. European stocks were broadly lower, with the STOXX Europe 600 falling 0.2%. GBP/USD plunged 1.1% to 1.3191 (a day high at 1.3480) after Bank of England Chief Economist Andrew Haldane pointed out that the central bank should come up with a package of monetary policy easing measures in its rate-setting meeting on August 4. Meanwhile, the UK’s FTSE 100 gained 0.2%. The pair broken below the 50-period moving average and remains under pressure below its key resistance at 138.30. Meanwhile, the relative strength index lacks upward momentum. As long as 138.30 holds as the key resistance, a drop towards 136.40 is possible.
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 141.70 and the second one, at 142.45. In the alternative scenario, short positions are recommended with the first target at 136.40 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 142.45. The pivot point is at 138.30.
Resistance levels: 141.70, 142.45, 143.50
Support levels: 136.40, 134.95, 134
The material has been provided by InstaForex Company – www.instaforex.com