GBP/JPY's recovery from 126.73 extended further to as high as 133.20 last week but lost momentum then and retreated. Considering that a short term bottom is formed at 126.73 on bullish convergence condition in 4 hours MACD and RSI, further rebound would still be seen as long as 129.03 minor support holds. Above 133.20 will target 38.2% retracement of 145.94 to 126.73 at 134.06 and above. Nevertheless, rise from 126.73 is treated as a correction to recent decline from 145.94 only. Hence, we'd expect strong resistance between 55 days EMA (now at 138.14) and 61.8% retracement 138.60 to limit upside and bring fall resumption. On the downside, below 129.03 minor support will argue that such recovery has completed and will flip intraday bias back to the downside for 126.73 low first.
In the bigger picture, no change to our bearish view 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.