FX.co ★ Technical analysis of GBP/JPY for July 26, 2016

GBP/JPY is expected to trade in a lower range as key resistance is at 138.70. The pair broke down the lower Bollinger band, and it is expected to look for a lower bottom. Meanwhile the relative strength index is badly directed. European stocks edged higher with the STOXX Europe 600 adding 0.2%. Germany's DAX rose 0.5% while the UK's FTSE 100 was down 0.3%. As long as 138.70 holds as the key resistance, a break towards 134.95 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 135.75. A break below this target will move the pair further downwards to 134.95. The pivot point stands at 138.70. 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 139.45 and the second one, at 140.15.

Resistance levels: 139.45, 140.15, 141.30

Support levels: 135.75, 134.95, 133.80