GBP/JPY tried to recover after dipping to 127.87 last week but the recovery was rather weak. Instead, Friday's fall argues that decline from 133.48 is ready to resume. Initial bias is on the downside this week for 127.87 and break will target a test on 126.54. Based on overall outlook in yen crosses, 126.54 would likely be taken out and in that case, deeper decline should be seen back to 61.8% retracement of 117.29 to 133.48 at 123.47 and below. On the upside, break of 130.22 resistance is needed to indicate completion of fall from 133.48. Otherwise, we'll be cautiously bearish in GBP/JPY even in case of recovery.
In the bigger picture, overall development in yen crosses dampen the bullish view that GBP/JPY has bottomed out at 116.83. And, with 140.02 resistance intact, choppy decline from 163.05 could extend through 116.83 to resume whole down trend from 251.09 (2007 high). On the upside, break of 133.48 is needed to revive the bullish case that GBP/JPY has bottomed at 116.83. Otherwise, more downside is likely in the cross.
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.