GBP/JPY Weekly Outlook

By IBTimes Staff Reporter | December 19 2009 6:25 AM

GBP/JPY's recovery extended further to as high as 146.89 last week. But after all, it's still limited by 147.43 resistance and we're holding on to the bearish view. That is, choppy recovery from 141.99 is treated as correction to fall from 149.15 only. A break below 143.12 minor support will suggest that such recovery is completed and will flip intraday bias back to the downside. Further break of 141.99 will target 139.26 support next. However, note that break of 147.43 will dampen this immediate bearish view and suggest that rise from 139.26 is still in progress for another high above 149.15 before completion.

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In the bigger picture, medium term rebound from 118.18, which is a correction to the long term down trend from 07 high of 251.90, has completed at 163.05 already. Fall from 163.05 is expected to resume after sideway consolidation from 139.69 completes and should target a new low below 118.81. However, note that sustained break of 61.8% retracement of 163.05 to 139.26 at 153.96 will argue that fall from 163.05 has finished already and will, in turn indicate that rise fro 118.81 is still in progress to another high above 163.05 before conclusion.

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. On resumption, the down trend will extend to 61.8% projection of 215.87 to 118.81 from 163.05 at 103.03 next, which is close to 100 psychological support.