After edging higher to 127.31, GBP/JPY reversed and dipped towards the end of the week. Such development argues that recovery from 123.29 is already over. Initial bias remains mildly on the downside this week for 123.29 first. Break will confirm resumption of the whole fall from 140.02 and should target 122.15 support and below. On the upside, above 126.53 will delay the bearish case and bring more recovery to 127.31 and above. However, we'll continue to stay bearish as long as 130.83 resistance holds and expect an eventual downside breakout.

In the bigger picture, choppy fall from 163.05 is treated as second leg of the consolidation pattern that started at 2009 low of 118.81 and there is no indication of completion yet. Outlook will remain cautiously bearish as long as 130.83 resistance holds and GBP/JPY is still in favor to make another low below 122.15. Nevertheless, we'd be watching for reversal signal once again around 118.81 (2009 low). On the upside, break of 130.83 will indicate completion of fall from 140.02 and turn near term outlook bullish. Decisive break of 140.02 resistance will now confirm medium term reversal and should start the third leg of consolidation pattern from 118.81 for 163.05 resistance and 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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