GBP/JPY completed a strong move up and stalled at the resistance line. At this new crossroad, the American Non-Farm Payrolls could help it make a decision.
After breaking the 140 area, the Geppy moved quickly towards 143.60, which was the peak in the middle of February. Will it fall back down towards 140? or continue higher?
The next line is 147.20 seen at the end of January and then 150 – already a major resistance line of resistance, and a round number. last seen at the beginning of the year. Looking down, 140 is the first line of support, followed by 138, the previous crossroads for GBP/JPY.
A lot depends on the Non-Farm Payrolls, that will be published on thin air this time. You may ask: What does this American figure, important as it is for the the majors, impact this cross?
The answer lies in the different behavior of each currency, as well as their current position against the dollar. The British Pound behaves in a more “normal” way – good NFP will send it down, while bad figures will send it up. GBP/USD is currently at 1.5240 and has room to move in both directions – a lot of room to move to the downside and also enough to move up towards 1.5350 – the major line of resistance.
The yen has another factor – risk. The yen enjoys fear and may rise against the all the currencies even if the dollar is rising. In addition, USD/JPY, just under 94, is at a strong resistance line. A break upwards or a drop off the resistance line could be violent.
Conclusion
So, if a really bad Non-Farm Payrolls is released, the yen will gain against the dollar, and the British Pound might not necessarily rise. In this case GBP/JPY can fall back down.
A good Non-Farm Payrolls can take USD/JPY over the top and GBP/USD just gently down – sending GBP/JPY high up.
Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.