The British pound falls against Japanese yen on Thursday

The British pound broke down during the trading session on Thursday, reaching towards the ¥148.50 level, an area that has a certain amount of support attached to it, but it also is minor at best. After all, we have broken down below the ¥150 level, which is a major round figure. The jobs number will have a major effect on the USD/JPY pair, which has a bit of a “knock on effect” over here based upon what’s going on with the Japanese yen in general. If we did turn around and break above the ¥150 level, that would be a very strong sign, but I think that eventually the sellers will return, and this will be especially true if the jobs number drives the GBP/USD pair lower, that will also put a lot of bearish pressure on this market as it would take out half of the strength immediately, which of course is a catalyst for lower pricing.

Higher jobs figures will probably spook the US stock market, because it should drive interest rates higher. That should drive down this pair based upon a “risk off” move. Ultimately, breaking below the ¥150 level is a negative event, and could end up sending this market much lower over the longer term. Ultimately, it’s not until we clear the ¥150 level on a daily close that I would begin to imagine going long at this point. I anticipate that the ¥147.50 level will be the next major support barrier underneath. It’s going to be difficult but selling signs of exhaustion will probably be the best way to go.

GBP/JPY Video 04.05.18