GBP/JPY has a wild ride during Wednesday

The British pound broke down significantly during the trading session on Wednesday, reaching down to the 149 handle, and then bounced significantly towards the 150 level again. This market continues to be very noisy and loud, so I think that we are looking at a sideways market over the next several sessions, as we get the jobs number coming out on Friday. The Friday number of course has a lot to do with risk appetite around the world, so this will have an influence on the GBP/JPY pair. However, between now and then I think that you can start to look for impulsive moves like this and fade them as the market gets too far ahead of itself.

I believe that the previous uptrend line on the daily chart will continue to cause a lot of resistance, and when you look at the weekly chart, we had formed several shooting stars in a row. I think that the market is starting to “lean” towards the downside, so it’s only a matter of time before some type of negative attitude could knock this market back down. To rally significantly, we should need to see a massive jobs number to bring on a huge “risk on” rally, which will push this market to the upside. The other thing that could move the market to the upside, could be a cooling of tensions between the United States and China, something that is hard to quantify until it happens. In the short term, I believe that we will bounce around significantly, and range bound trading should be what we see for the next 36 hours or so.