GBP/JPY’s rise from 123.94 resumed last week by breaking 135.74 resistance and accelerated to as high as 139.73. Initial bias remains on the upside this week for 100% projection of 123.94 to 135.74 from 129.27 at 141.07. Firm break there will target 147.95 key resistance. On the downside, break of 135.95 support is needed to indicate short term topping. Otherwise, outlook will remain bullish in case of retreat.
In the bigger picture, we’re still seeing price actions from 122.75 (2016 low) are seen as a sideway consolidation pattern. As long as 147.95 resistance holds, an eventual downside breakout remains in favor. however, firm break of 147.95 will raise the chance of long term bullish reversal. Focus will then be turned to 156.59 resistance for confirmation.
In the longer term picture, repeated rejection by 55 month EMA indicate long term bearishness in the cross. Down trend from 251.09 (2007 high) should eventually resume through 122.75 to 116.83 (2011 low) and below. However, sustained break of 55 month EMA (now at 145.32) will dampen this view and could open up further rise to 195.86 (2015 high).
