GBP/JPY is expected to trade with a bullish bias above 126.80. The pair is consolidating around its 20-period and 50-period moving averages, which are flat and do not show clear directions. Nevertheless, 126.80 is playing a key support role, which should limit the downside potential. The relative strength index is around its neutrality level at 50 and lacks downward momentum. As long as the key support at 126.80 is not broken, look for a further upside toward 127.60. A break above this level would call for a further advance toward 127.90.

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 127.60 and the second one at 127.90. In the alternative scenario, short positions are recommended with the first target at 126.30 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 125.90. The pivot point lies at 126.80.

Resistance levels: 127.60, 127.90, 128.70

Support levels: 126.30, 125.90, 124.80