GBP/JPY’s sharp rise last week confirmed that pull back from 148.09 has completed at 138.65 already. With a temporary top in place at 146.52, intraday bias is neutral this week first for consolidation. But downside of retreat should be contained by 143.25 minor support and bring rally resumption. Above 146.52 will turn bias to the upside to retest 148.09/42 resistance zone. Decisive break there will extend whole rally from 122.36 to long term fibonacci level at 150.43 next.
In the bigger picture, rise from medium term bottom at 122.36 is expected to continue to 38.2% retracement of 196.85 to 122.36 at 150.43. Decisive break there will carry long term bullish implications and pave the way to 61.8% retracement at 167.78. In case the sideway pattern from 148.42 extends, we’d be looking for strong support from 135.58 and 50% retracement of 122.36 to 148.42 at 135.39 to contain downside.
In the longer term picture, it remains to be confirmed is whole down trend from 195.86 has completed at 122.36 already and there is no confirmation yet. But in any case, firm break of 38.2% retracement of 196.85 to 122.36 at 150.43 would pave the way to 61.8% retracement at 167.78. And with that, the 55 month EMA will be firmly taken out which suggests that price actions from 116.83 is indeed a sideway pattern that could last more than a decade.
