GBP/JPY buyers look for a break above 148.00
But for now buyers are finding it tough as a cluster of key resistance levels hold the upside move back ahead of the UK labour market report at 0830 GMT and Brexit talks to come tomorrow in Brussels. On the daily chart, the 200-day MA (blue line) is proving to be a tough resistance level for the pair to move above. That currently sits at 147.99.
Looking at the hourly chart, the 100-hour MA (red line) @ 147.86 also acts as a resistance level for the pair currently with the 200-hour MA (blue line) @ 148.15 sitting not too far away as well. Hold below the 100-hour MA and near-term price bias remains more bearish still.
Those three levels pointed out will be key resistance areas to look at in trading the pair today. Break above them and price bias then turns more bullish and we could be set to revisit the July high @ 149.32 once again - which is proving to be a stubborn resistance level to break since the end of September.
However, there are still plenty of risk events this week that can potentially shift the bias in the pair quite suddenly. In just over half an hour, there's the UK labour market report which may have some short-term impact on the pound but at the end of the day, it's still all about Brexit talks. And we'll only get a meaningful update on that tomorrow from the EU Summit.
But don't forget about the yen part of the equation too. Although E-minis are trading higher now, market sentiment rests on the performance of the US cash equity market so that will be a key driver for the pair in trading later today.
As mentioned earlier, the S&P 500 has not had two consecutive daily closes since January 2016. The last time that happened, it precipitated a 12% decline in the index. We already had a close below it yesterday, so let's see how equities will perform later today and whether or not it will be a cause of concern for risk sentiment in the sessions to come.
