GBP/JPY dropped further to as low as 120.88 last week before forming a temporary low there and turned sideway. The development continues to affirm the case that whole choppy rebound from 116.83 is finished at 127.30 already, ahead of the falling 55 weeks EMA. While some more sideway trading might be seen initially this week, further decline is expected and below 120.88 will target 119.98 support. Break will confirm the bearish case and target 116.83 and below. On the upside, break of 123.15 minor resistance is needed to signal short term bottoming. Otherwise, we'll staying cautiously bearish in the cross.
In the bigger picture, there is no sign of reversal in GBP/JPY as it's still staying well below the falling 55 weeks EMA (now at 128.44). The down trend from 2007 high of 251.09 is still expected to continue 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, medium term outlook will remain bearish even in case of further 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 at least a break of 100 psychological level before the cross bottoms.