GBP/JPY’s strong rebound last week suggested that that it has defended 143.72 key support again. More importantly, the rise from 131.51 is possibly not completed yet. Initial bias is now on the upside this week for 147.01 resistance first. Break will solidify this bullish case and target 148.87/149.48 resistance zone next. On the downside, though, break of 144.80 minor support will turn focus back to 143.72 key support.
In the bigger picture, focus is staying on 149.98 key resistance. Decisive break there should confirm that medium term fall from 156.59 (2018 high) has completed at 131.51 already. Rise from 131.51 is then seen as the third leg of the corrective pattern from 122.36 (2016 low). GBP/JPY should then target 156.59 and above. However, rejection by 149.98 will retain medium term bearishness and could extend the fall from 156.59 through 131.51 to 122.36.
In the longer term picture, the rise from 122.36 (2016 low) to 156.59 (2018 high) doesn’t display a clear impulsive structure. Thus, we’re treating price actions from 122.36 as a corrective pattern. In case of an extension, strong resistance is likely to be seen at 50% retracement of 195.86 (2015 high) to 122.36 at 159.11 to limit upside. On the downside, break of 131.51 support will bring 122.26 low back into focus.
