GBP/JPY's choppy fall from 127.31 extended further lower last week and the development continued to favor the case that recovery from 123.39 has finished at 127.31. Initial bias remains on the downside for 123.29 support first. Break will confirm resumption of the whole decline from 140.02 and should target 61.8% projection of 130.83 to 123.29 from 127.31 at 122.65 first and then 122.15 low. On the upside, above 125.24 minor resistance will turn bias neutral and delay the bearish case, that is, more consolidations above 123.29. But after all, we'll stay bearish in the cross 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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