GBP/JPY’s recovery last week indicates short term bottoming at 144.97. Initial bias remains neutral this week for consolidation above there. In case of stronger rise, upside should be limited by 150.92 (50% retracement of 156.59 to 144.97 at 150.78 to bring fall resumption. Break of 144.97 will extend the decline from 156.59 to 143.51 medium term fibonacci level next.
In the bigger picture, the case for medium term reversal continues to build up. There is bearish divergence condition in daily MACD. 146.96 support was taken out. And GBP/JPY was rejected by 55 month EMA. Break of 38.2% retracement of 122.36 to 156.59 at 143.51 will pave the way to 61.8% retracement at 135.43 and below. This will now be the preferred case as long as 150.92 resistance holds.
In the longer term picture, rejection from 55 month EEMA (now at 154.20) argues that medium term rebound from 122.36 might be completed. And, the corrective structure also carries some bearish implication today. Sustained break of 135.58 key support will likely bring retest of 122.36 low, with prospect of resuming the long term down trend from 195.86 (2015 high).
