GBP/JPY's consolidation from 126/73 extended further last week but another recovery attempt was limited at 135.12 and the cross reversed. Initial bias is neutral this week. Below 132.20 minor support will suggest that fall fro 136.39 is likely resuming and break of 130.42 will target a retest of 126.73 low. On the upside, above 135.12 will argue that recovery from 126.73 is extending for another high above 136.39. But after all, we'd continue to expect strong resistance at 61.8% retracement of 145.94 to 126.73 at 138.60 to limit upside and bring down trend resumption finally.

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. GBP/JPY

GBP/JPY

GBP/JPY

GBP/JPY