GBP/JPY’s rise from 131.51 extended to as high as 142.22 last week and broke 139.88 resistance. Such rebound turned out to be stronger than originally expected. For now, further rise is expected as long as 137.35 minor support holds. Rebound from 131.51 will target 1423.93 resistance first. Break will pave the way to 149.48 resistance next.
In the bigger picture, corrective medium term rise from 122.36 (2016 low) has completed at 156.69 (2018 high) already. That came after failing to break through 55 month EMA. No change in this view. Strong rebound from 131.51 argues that fall from 156.59 is just the second leg of the corrective pattern from 122.36. Break of 149.38 resistance will confirm the third leg has started to 159.69, and possibly above. Nevertheless, break of 131.51 will pave the way to retest 122.26 low.
In the longer term picture, rejection by 55 month EMA is seen as a bearish signal. And fall from 195.86 (2015 high) should still be in progress. Break of 122.26 should confirm this bearish case and send GBP/JPY through 116.83 low.
