GBP/JPY’s strong rebound last week suggests that pull back from 152.52 has completed at 148.50, ahead of 148.09 cluster support ( 23.6% retracement of 133.03 to 152.52 at 147.92) as expected. Initial bias is mildly on the upside for retesting 152.52 high first. Break there will resume whole up trend from 123.94. Next target is 156.59 long term resistance. In case the consolidation extends with another fall, we’d continue to expect strong support from 147.92/148.09 to contain downside and bring rebound.
In the bigger picture, rise from 123.94 is seen as the third leg of the pattern from 122.75 (2016 low). Next target is 156.59 resistance (2018 high). Sustained break there should confirm long term bullish trend reversal. On the downside, break of 142.71 resistance turned support is needed to be the first sign of completion of the rise from 123.94. Otherwise, outlook will remain bullish even in case of deep pull back.
In the longer term picture, the strong break of 55 months EMA (now at 143.95) is an early sign of long term bullish reversal. Firm break of 156.69 resistance should now confirm the start of an up trend for 195.86 (2015 high).
