GBP/JPY's pull back fro 128.82 continued last week and deeper might still be seen in near term. But downside is expected to be contained by 124.41 support and bring rebound. Above 126.69 minor resistance will flip bias back to the upside. Break of 128.82 will extend the whole rally from 118.82 to 133.48 resistance next. Though, break of 124.41 will dampen our bullish view and turn focus back to 120.82 support instead.

In the bigger picture, at this point, we'd like to maintain that price actions from 116.83 (2011 low) are corrective in nature so far. Rise from 118.82 could be the third leg of the pattern from 116.83 and might target 133.48 and above. But this is far from being certain. After all, the likely scenario is that we'll see more range trading between 116.83 and 140.02 (50% retracement of 163.05 to 116.83 at 139.94) ahead, before an eventual downside breakout. We'll favor this view as long as 140.02 resistance holds.

In the longer term picture, fall from 251.09 is treated as resumption of multi decade down trend. Current development gives no indication of medium term reversal yet and GBP/JPY would likely drop towards 100 psychological level on down trend resumption.

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