GBP/JPY edged higher to 137.75 last week but failed to sustain gain and turned sideway. Initial bias is neutral this week and some more consolidations could be seen first. But after all, short term outlook will remain bullish as long as 134.18 support holds and rise from 130.82 is still expected to continue. Above 137.75 will target 61.8% retracement of 145.94 to 126.73 at 138.60 next. However, break of 134.18 will argue that GBP/JPY might have topped out already and will turn focus back to 130.82 support instead.

In the bigger picture, with 145.94 resistance intact, we'd still favor that fall from 163.05 is not finished yet. Break of 130.82 support will indicate that corrective rebound from 126.73 is completed and the fall from 163.05 is resuming for a retest of 118.18 low. Break there 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 from 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/consolidation from 118.81.

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