Last night, the Dow Jones managed to limp to a fifth consecutive positive session.

The gains were tiny and other US markets such as the S&P 500 and the Nasdaq closed down on the day. Although the closing levels last night were nothing to write home about, the near 1% reversal from the highs of the day sent ripples through Asian markets.

A return of more cautious trading has spilled over into the early European session with the FTSE, CAC and DAX opening down over 0.5%.

Today is a busier session than yesterday with a number of middle tier economic announcements. At 08.30 BST we have UK mortgage approval levels followed by the latest US house price data at 13.00. Following this at 14.00 we get US consumer confidence figures and MPC member Bean speaking after the UK close.

GBP/JPY Heads Towards Resistance Level

The cautious trading seen on stock markets has made its way onto forex markets with the Dollar and Yen building on yesterday’s gains. On balance, the Pound is bearing the brunt of the selling, dropping 0.4% against the Dollar and 0.85% against the Yen.

The GBP has bounced off the ¥153.50 level three times already this month and it looks to be heading towards this level once again. Could it be fourth time lucky for sterling this time?

With oil prices still holding around the $70 level, there are indications that the bulls aren’t done yet, which could be good news for the GBP/JPY. If the pair hits the ¥153.50 level once again, a Double (Up) Trade could be one way to play it.

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