GBP/JPY dropped to as low as 119.37 last week but lost some downside momentum with bullish convergence condition in 4 hours MACD. Nonetheless, we're favoring the case that corrective rise from 116.83 is already finished at 127.30 and fall from 140.02 is set to resume. Outlook will remain cautiously bearish as long as 121.75 minor resistance holds. Below 119.37 will target a test on 116.83 first. Break will extend the fall from 140.02 to 61.8% projection of 140.02 to 116.83 from 127.30 at 112.96. On the upside, though, break of 119.37 would dampen this immediate bearish view and will flip bias back to the upside to extend the consolidation/correction from 116.83.
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 128.13). 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.