On Tuesday, the GBP/JPY pair traded mixed, but, at the same time, the price hit new lows.
The British currency was supported by the publication of macroeconomic statistics for August in the UK. The number of Mortgage Approvals reached 71.03 K against the forecast of 70 K.
During the morning session today, the pair is recovering amid quite negative Retail Sales (0.8% in August against 1.1% forecast) and Industrial Production (-0.5% in August against +1.0% forecast) statistics, released in Japan.
Support and resistance
Bollinger Bands indicator on the daily chart is directed down, while the price range is widening. At the same time, the indicator has formed a buy signal, as the price has left the lower border of the range. MACD is trying to turn up. Stochastic is in the oversold zone and trying to turn up.
According to the indicators, an upward correction is possible in the short run.
Support levels: 181.37, 180.39 (7 September local low), 179.50, 179.00.
Resistance levels: 182.00, 182.46 (29 September local high), 183.23, 184.17, 185.00, 186.26, 187.32, 188.56.
Long positions can be opened when the pair rebounds near the current support levels and breaks out 182.76 with the target at 183.77 and stop-loss at 182.30. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 181.40 with the target at 180.25 and stop-loss at 181.80. Validity – 2-4 days.