GBP/JPY's fall from 137.75 extended further to as low as 131.96 last week even though it lost some intraday downside momentum and price actions were rather choppy. In any case, deeper decline is still expected as long as 134.79 resistance holds, for 130.82 support. Break there will confirm our bearish view that whole rebound from 126.73 is finished at 137.75 already. In such case, whole decline from 163.05 should be resuming for a test on 118.81 low. On the upside, strong rebound above 130.82 and break of 134.79 will mix up the outlook and argue that GBP/JPY might not have topped out yet. Focus will then be turned back to 137.75 resistance instead.
In the bigger picture, GBP/JPY is still trending well below the medium term falling trend line from 163.05 and thus fall from there is still in progress for a test on 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, note that sustained trading above the trend line (now at 137.78) will argue that fall from 163.05 is finished and turn focus to 145.94 for confirmation. 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.