GBP/JPY directs three-day downtrend towards 152.00 ahead of UK employment data

GBP/JPY stays on the back foot for the third consecutive day, down 0.15% intraday around 152.15, amid the initial Tokyo open on Thursday. In doing so, the cross-currency pair refreshes the weekly bottom amid the dull markets and cautious sentiment before the UK employment figures for June.

Although US Federal Reserve Chairman Jerome Powell rejected the need for tapering and rate-hike, at least for now, firmer prints of the US Producer Price Index (PPI), keeps reflation fears on the table. The same weigh on the US Treasury yields and put a haven bid under the Japanese yen (JPY).

The worsening coronavirus (COVID-19) conditions in the UK and Japan also becomes a reason for the GBP/JPY traders’ rush to risk safety. On Wednesday, Britain marked above 40,000 cases for the first time since early January whereas Tokyo registered the highest daily infections in two months with 1,149 figures.

It’s worth noting that UK Brexit Minister’s blaming of the Northern Ireland (NI) protocol, for the recent jump in Irish trade, as well as British fishing industry experts’ warning of further EU-UK jitters, also weigh on the GBP/JPY prices.

Amid these plays, S&P 500 Futures drop 0.20% whereas the US 10-year Treasury yield drops 1.2 basis points (bps) to 1.344% by the press time.

Moving on, the UK’s June month Claimant Count Change, prior -92.6K and Unemployment Rate for three months to May, expected to remain unchanged at 4.7%, will be crucial for GBP/JPY traders to watch for fresh impulse. Also, the reflation woes, Treasury yields and covid updates are extra catalysts to take care of.

Technical analysis

Not only a clear U-turn from 153.20-25 resistance confluence, comprising 21-DMA and a three-week-old falling trend line, but a sustained break of the 100-SMA, around 152.45, also directs GBP/JPY sellers to the monthly low near 150.65.