GBP/JPY's rebound from 130.00 extended initially last week but was limited at 140.55, reversed and fell sharply. Initial bias remains on the downside this week and deeper decline should be seen towards 130.00 low. But decisive break there is needed to confirm down trend resumption. Otherwise, more consolidations would be seen first. On the upside, above 136.60 minor resistance will flip intraday bias back to the upside for another test on 140.55 as correction from 130.00 extends.
In the bigger picture, our preferred view is that rebound from 118.81, which is treated as correction in the larger down trend from 2007 high of 251.09, has completed at 163.05 already after failing to sustain above 55 weeks EMA. Fall from 163.05 is tentatively treated as resumption of such long term down trend and should target 61.8% projection of 215.87 to 118.81 from 163.05 at 103.06 next, which is close to 100 psychological level. On the upside, break of 145.94 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. Another long term decline is still expected after completion of the correction from 118.81.