GBP/JPY continued to gyrate lower towards 127.10 last week. Further decline is still expected with 129.57 resistance intact. Break of 127.10 will confirm resumption of whole fall from 133.48 and should target 61.8% retracement of 117.29 to 133.48 at 123.47. However, downside momentum is so far rather weak. A break of 129.57 will indicate that fall from 131.79 has finished and flip bias back to the upside for this resistance and above instead.

In the bigger picture, we're like to point out that GBP/JPY has been the relatively stronger yen cross. The choppy decline from 163.05 should either be a diagonal triangle or the second leg of a consolidation pattern from 118.81. In either case, 116.83 is a medium term bottom and fall from 133.48 should be contained above this level. And, rise from 116.83 should eventually resume and pass through 140.02 resistance towards 163.05 key resistance level. We'll maintain this view unless the structure of the fall from 133.48 suggests otherwise.

In the longer term picture, fall from 251.09 is treated as resumption of multi decade down trend. A medium term bottom is in place at 116.83 and we'd anticipate stronger rally ahead in medium term. But there is not clear sign of trend reversal yet and hence, even in case of stronger rally, strong resistance should be seen near to 163.05. Further decline is expected in the long run for 100 psychological level and the down trend resumes.