GBP/JPY's rebound from 116.83 short term bottom extended to as high as 122.60 last week and touched 55 days EMA. Initial bias remains on the upside this week and such rebound would extend further towards 161.8% projection of 116.83 to 120.78 from 116.96 at 123.35 and above. Though, we'd expect strong resistance from 125.48/68 cluster resistance (61.8% retracement of 130.83 to 116.83 at 125.48, 38.2% retracement of 140.02 to 116..83 at 125.68) to limit upside to conclude the corrective rise and bring down trend resumption. On the downside, below 120.33 minor support will flip bias back to the downside for retesting 116.83 low first.
In the bigger picture, fall from 163.05 is part of the long term down trend from 2007 high of 251.09 and is still in progress. Next target will be 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.