GBP/JPY jumped to as high as 135.79 last week but was limited below 135.99/136.39 resistance zone and fell sharply. The cross is still staying in converging range of 130.42/136.39 and thus, we'll stay neutral first. On the downside, break of 131.23 support will indicate that whole rebound from 126.73 should have completed and deeper decline should then be seen to retest this low first. On the upside, above 135.79 will bring another rise to 61.8% retracement of 145.94 to 126.73 at 138.60 and above.

In the bigger picture, the choppy nature of the fall from 163.05 is mixing up the outlook a bit. But in any case, such decline is still in progress as long as 145.94 resistance holds and further fall should be seen to retest 118.18 low first. Break will confirm that whole down trend from 2007 high of 251.09 has resumed for 61.8% projection of 215.87 to 118.81 from 163.05 at 103.06 next, which is close to 100 psychological level. However, break of 145.94 will indicate that fall fro 163.05 is finished. Also, this will suggest that such fall is merely the second wave of the whole consolidation pattern from 118.81 and will bring another rise to 163.05 and above before resuming the longer term down trend.

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.