GBP/JPY’s rose further to 198.93 last week as corrective pattern from 180.00 extended with another rising leg. As a temporary top was formed, initial bias is neutral this week first. Further rally will remain in favor as long as 194.04 support holds. Break of 199.79 will target channel resistance (now at 203.09).
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 172.51).
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