FX.co ★ Technical analysis of GBP/JPY for July 22, 2016

GBP/JPY is under pressure. The pair is turning down and remains under pressure below the 50-period moving average. Meanwhile, the relative strength index lacks upward momentum. As expected, the European Central Bank decided to hold interest rates steady. ECB President Mario Draghi said the central bank is ready to act if necessary but it needs more data before considering further action. The euro was little changed and closed 0.1% higher at 1.1023. As long as 140.80 holds as the key resistance, a drop toward 138.30 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 139. A break below this target will move the pair further downwards to 13.30. The pivot point stands at 140.80. 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 141.30 and the second one, at 142.45.

Resistance levels: 141.30, 142.45, 143.25

Support levels: 130.00, 139.30, 138.30