GBP/JPY’s fall from 199.79 extended lower last week despite interim rebound. Current development suggests that corrective rise from 180.00 has completed with three waves up to 199.79. Initial bias is on the downside this week for 183.70 support. For now, risk will stay on the downside as long as 197.77 resistance holds, in case of recovery.
In the bigger picture, price actions from 208.09 are seen as a correction to whole rally from 123.94 (2020 low). The range of consolidation should be set between 38.2% retracement of 123.94 to 208.09 at 175.94 and 208.09. However, decisive break of 175.94 will argue that deeper correction is underway.
In the longer term picture, considering bearish divergence condition in W MACD, 208.09 is at least a medium term top. It’s still early to conclude that the up trend from 122.75 (2016 low) has completed. But it’s at least in a medium term corrective phase, with risk of correction to 55 M EMA (now at 172.07).
