GBP/JPY's choppy fall from 122.56 continued last week and the sustained trading below 4 hours 55 EMA argued that recovery from 119.37 is finished. Downside momentum is not convincing so far. But with 121.78 minor resistance, we'd favor deeper decline this week to 119.37 low first. Break will confirm resumption of whole fall from 127.30 and should target 116.83 low next. On the upside, above 121.78 minor resistance will dampen this immediate bearish case and bring another rise to extend the recovery from 119.37. But after all, upside is expected to be limited by 50% retracement of 127.30 to 119.37 at 123.33 and bring fall resumption eventually.

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 127.42). 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 127.30 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.

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