GBP/JPY dived to as low as 132.13 initially last week but staged a strong rebound on Friday to close strongly at 136.62. The development indicates that a short term bottom is formed at 132.13 and we'd expect more corrective rise going forward, probably to 38.2% retracement of 150.68 to 132.13 at 139.21. Nevertheless, strong resistance should be seen as GBP/JPY enters into 138.23/143.59 resistance zone. We'd expect the corrective rise from 132.13 to conclude below 143.59 cluster resistance (61.8% retracement of 150.68 to 132.13 at 143.59 and 38.2% retracement of 163.05 to 132.13 at 143.94) and bring resumption of the fall from 163.05. On the downside, below 134.05 minor support will flip intraday bias back to the downside for retesting 132.13 support first.
In the bigger picture, while the rebound from 132.13 was strong, there is no change in the bearish outlook. 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. Decline from 163.05 is tentatively treated as resumption of the long term down trend from 2007 high of 251.09 and should target a new low below 118.81. On the upside, decisive break of 143.59 cluster resistance is needed to invalidate this view. Otherwise, outlook will remain bearish.
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.