GBP/JPY's strong rebound last week indicates that a short term bottom if formed at 117.29, on bullish convergence condition in 4 hours MACD. Such development now argues that fall from 127.30 is over. Rise from 117.29 is likely the third leg of the consolidation pattern from 116.83. In any case, initial bias remains on the upside this week for 122.76 resistance first. Break will target a test on 127.30. On the downside, below 118.30 minor support will indicate completion of the rebound and flip bias back to the downside for 117.29 support.

In the bigger picture, current development indicates that consolidation from 116.83 is still in progress and fall from 140.20, which is part of the medium term down trend from 163.05, is not ready to resume yet. While rise from 117.29 might extend further higher, we'd expect strong resistance from 50% retracement of 140.02 to 116.83 at 128.42 to finish the consolidation and bring down trend resumption. We will not consider medium term trend reversal yet before sustained trading above 128.42 fibonacci level.

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.