GBP/JPY dropped to as low as 116.83 last week and took out 118.81 prior historical low with relative ease. Initial bias remains on the downside this week with 119.13 minor resistance intact and current fall should then target 161.8% projection of 130.83 to 123.29 from 127.31 at 115.11 in near term On the upside, above 119.13 minor resistance will turn bias neutral and bring consolidations. But recovery should bel limited below 123.29 support turned resistance and bring fall resumption.
In the bigger picture, the strong break of 118.81 support indicates that long term down trend from 2007 high of 251.09 has resumed. Such down trend would now be targeting 61.8% projection of 215.87 to 118.81 from 163.05 at 103.06, which is close to 100 psychological level. on the upside, break of 130.83 resistance is needed to be the first signal of medium term reversal. Otherwise, outlook will remain bearish even in case of strong rebound.
In the longer term picture, fall from 251.09 is treated as resumption of multi decade down trend. Monthly MACD will likely be dragged down by the current decline, which suggest that the cross is building up downside momentum again. Current development now favors a break of 100 psychological level before the cross bottoms.