GBP/JPY edged higher to 132.91 last week but again failed to sustain gain and retreated back to established range. Upside momentum is also unconvincing with mild bearish divergence condition in 4 hours MACD. Nevertheless, we'll stay cautiously bullish as long as 130.87 minor support holds and expect GBP/JPY to build up upside momentum again sooner or later. Above 132.91 will target 134.19 key resistance next. Though, below 130.87 will be the first signal of topping and further break of 129.49 will bring retest of 125.48 support instead.

In the bigger picture, price actions from 118.81 are treated as consolidation in the larger down trend from 251.09, with first leg finished at 163.05. Choppy fall from 163.05 is treated as the second leg and there is no confirmation that such fall is finished. Nevertheless, even in case of deeper decline, strong support should be seen at 118.81 low to contain downside and bring another medium term rally as the third leg. On the upside, break of 134.19 resistance will indicate that the third leg of the consolidation has likely started and will turn outlook bullish for 163.05 resistance and possibly above.

In the longer term picture, fall from 251.09 is treated as resumption of multi decade down trend. Note that the fall from 215.87 is not treated as the fifth wave, but the third wave inside the third wave that started at 241.35. Another long term decline is still expected after completion of the correction/consolidation from 118.81, towards 100 psychological level.

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