GBP/JPY dropped to 120.66 last week and then formed a temporary bottom there and turned sideway. Initial bias remains neutral this week for more consolidations. Another rise cannot be ruled out but upside should be limited by 123.29 and bring fall resumption. Below 120.66 will extend the decline from 140.02 through 120 psychological level towards 118.81 low.

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 further decline would be seen. 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. 118.81 is a medium term bottom and price actions since there are viewed as consolidation in the long term down trend only. That is, the down trend from 251.09 is not over yet and we'd expect an eventual downside breakout to send GBP/JPY through 100 psychological level.

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