Technical analysis of GBP/JPY for October 11, 2016

GBP/JPY is under pressure. The pair remains capped by its descending trend line, and is likely to test the next support at 126.80. The downward momentum is further reinforced by the falling 50-period moving average, which maintains a bearish bias. In addition, the 130 level represents a key resistance, and the upside potential should be limited by it. The British pound kept defending its positions as "hard Brexit" uncertainty remained. GBP/USD sank 0.6% further to 1.2358 extending its losing streak to a third session.

In these perspectives, as long as 130 is not broken up, the pair is likely to pull back to its next level at 126.80 and even to 126 as 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 126.80. A break below this target will move the pair further downwards to 126. The pivot point stands at 130. 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 131.00 and the second one at 132.30.

Resistance levels: 131.00, 32.30, 133.25

Support levels: 126.80, 126, 124.40