GBP/JPY lifted by Yen selling

GBP/JPY cross is having a good time out there despite Cable weakness largely due to a broad based sell-off in the Japanese Yen.

Gains capped at daily Pivot resistance

Pair ran into daily pivot R1 located at 131.31 and retreating slightly to trade around 131.10 levels. Japanese Yen dropped in Asia on improved risk appetite on account of oil rally and easing Deutsche Bank concerns. Furthermore, talk of foreign QE also added to the bearish tone around Yen.

Meanwhile, Cable sell-off stalled near previous day’s low of 1.2818. Ahead in the day, the broader market sentiment and the UK construction PMI (Sep) figure could influence the cross. Yen traders need to keep an eye on the action in the Deutsche Bank shares in Germany.

GBP/JPY Technical Levels

Acceptance above 131.31 (daily pivot R1) could yield a rally to 132.44 (Sep 29 high) above which the cross could test supply around 133.41 (50-DMA). On the other hand, a breakdown of support at 130.90 (10-DMA) would shift risk in favor of a drop to 130.00 (zero figure) and 129.63 (Sep 27 low).