GBP/JPY jumped to as high as 127.30 last week before making a temporary top there and turned sideway. Initial bias is neutral this week and we'd see some more consolidation first. Above 127.30 will extend the rebound from 116.83 to 50% retracement of 140.02 to 116.83 at 128.42 next. On the downside, though, break of 112.63 support will argue that such corrective rebound is finished and should turn bias back to the downside for retesting 116.83 support instead.
In the bigger picture, while rebound from 116.83 was strong, there is no sing of treat reversal yet. We'd still favor more downside in medium term to extend the down trend from 2007 high of 251.09 to 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.