GBP/JPY edged higher to 158.04 last week but failed to break through 158.19 resistance and retreated sharply. Initial bias is neutral this week first. On the downside, break of 155.11 minor support should argue that corrective pattern from 158.19 has started another falling leg. Intraday bias will be back on the downside for 152.88 support. Break there will target 148.94. Nevertheless, on the upside, sustained break of 158.19 will resume larger up trend.
In the bigger picture, price actions from 158.19 are seen as developing into a consolidation pattern to up trend from 123.94 (2020 low). Downside should be contained by 123.94 to 158.19 at 145.10 to bring rebound. Firm break of 158.19 will resume the up trend to long term fibonacci level at 167.93. However, sustained break of 145.10 will raise the chance of trend reversal and target 61.8% retracement at 137.02.
In the longer term picture, as long as 55 month EMA (now at 147.30) holds, we’d still favor more rally to 61.8% retracement of 195.86 to 122.75 at 167.93. But sustained trading below 55 month EMA will at least neutralize medium term bullishness and re-open the chance of revisiting 122.75 low (2016 low).
