GBP/JPY recovered to as high as 122.56 last week but struggled to take out 55 days EMA decisively. Another recovery is mildly in favor as long as 120.75 minor support holds. However, note that the choppy structure and weak momentum of the rebound from 119.37 argues that it's a correction only. Hence, even in case of another rise, we'd expect upside to be limited by 50% retracement of 127.30 to 119.37 at 123.33 and bring fall resumption. Below 120.75 will flip bias back to the downside and should send GBP/JPY through 119.37 towards 116.83. Though, break of 123.33 fibo level will suggest rise from 119.37 is indeed the third leg of the consolidation pattern from 116.83 and would possibly target 127.30 and above before completion.
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.