GBP/JPY dropped to as low as 117.29 last week as fall from 127.30 continued. Initial bias remains on the downside this week for 116.83 key support level next. Break there will confirm resumption of larger down trend. On the upside, break of 119.11 resistance is needed to signal short term bottoming. Otherwise, near term outlook will remain bearish even in cas of recovery.

In the bigger picture, fall from 127.30 is tentatively treated as resumption of decline from 140.20, which is part of the medium term down trend from 163.05. Break of 116.83 will confirm such down trend resumption and should target 61.8% projection of 140.02 to 116.83 from 127.30 at 112.96. On the upside, break of 127.30 resistance is needed to be the first sign of medium term reversal. Otherwise, outlook will remain bearish.

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 61.8% projection of 215.87 to 118.81 from 163.05 at 103.06, which is close to 100 psychological level, before the cross bottoms.

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