Despite dripping to 126.54 last week, GBP/JPY quickly rebounded and the development suggest that pull back from 130.13 is finished already. Initial bias is mildly on the upside this week for 130.13. Break will confirm resumption of whole rise from 117.29 and should target 61.8% retracement of 140.02 to 116.83 at 131.16. Break will target a test on 140.02 next. On the downside, below 126.54 will bring another fall towards 55 days EMA (now at 124.12) to extend the correction.
In the bigger picture, recent development argues that choppy decline from 163.05 is completed at 116.83 already. Focus remains on 140.02 and sustained break there will confirm this bullish case. More importantly, this will also signal completion of the whole down trend from 2007 high of 251.09. In such case, stronger rise should be seen back to retest on 163.05 resistance next.
In the longer term picture, fall from 251.09 is treated as resumption of multi decade down trend. It's still a bit too early to say whether such down trend is finished yet and as long as 140.02 resistance holds, another fall would remain favor to 100 psychological level. Nonetheless, break of 140.02 will confirm bottoming and GBP/JPY Could then correct the whole down trend form 251.09.