GBP/JPY formed at short term bottom at 124.18 and rebounded strongly on Japan intervention last week. The breach of 130.27 resistance was brief and GBP/JPY fails to sustain above the falling 55 days EMA so far. Thus, there is no indication of reversal yet and rebound from 124.18 is treated as a correction only. Initial bias is neutral this week. Below 126.96 minor support will flip bias back to he downside for 124.18 first. Break will confirm that whole fall from 140.02 has resumed and should target 122.15 next. Nevertheless, above 130.83 will now argue that fall from 140.02 has indeed finished and will turn bias back to the upside for 135.11 resistance for confirmation.

In the bigger picture, choppy fall from 163.05 is treated as second leg of the consolidation pattern that started at 2009 low of 118.81 and there is no indication of completion yet. Outlook will remain cautiously bearish as long as 135.11 resistance holds and GBP/JPY is still in favor to make another low below 122.15. Nevertheless, we'd be watching for reversal signal once again around 118.81 (2009 low). On the upside, break of 135.11 resistance will signal that rebound from 122.15 is resuming. Decisive break of 140.02 resistance will now confirm medium term reversal and should start the third leg of consolidation pattern from 118.81 for 163.05 resistance and above.

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, towards 100 psychological level.

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