GBP/JPY dipped to 123.29 last week before forming a temporary low there and recovered. The development affirmed the case that fall from 140.02 is still in progress. While some sideway trading might be seen initially this week, we'd expect recovery to be limited by 126.24 minor resistance and bring fall resumption. Below 123.29 will target 122.15 and below. Above 126.24 will indicate short term bottoming and should being stronger rebound. But after all, we'll stay bearish as long as 130.83 resistance holds and favor more downside ahead.

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 130.83 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 130.83 will indicate completion of fall from 140.02 and turn near term outlook bullish. 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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