GBP/JPY Daily Outlook

Daily Pivots: (S1) 138.09; (P) 141.44; (R1) 143.54; More

GBP/JPY dropped sharply overnight to a low as 139.38 before recovering slightly above 139.26 key support. At this point, intraday bias remains on the downside. Firm break of 139.26 support will confirm our bearish view that whole decline from 163.05 is resuming and should target 61.8% retracement of 118.81 to 163.05 at 135.70 next. On the upside, above 142.38 will turn intraday bias neutral and bring consolidations. But upside should be limited below 145.26 resistance and bring fall resumption.

In the bigger picture, medium term rebound from 118.18, which is a correction to the long term down trend from 07 high of 251.90, has completed at 163.05 already. Fall from 163.05 is possibly resuming as consolidation pattern from 139.69 has likely finished at 150.68 already. Break of 139.26 will confirm this bearish case and target 61.8% retracement of 118.81 to 163.05 at 135.70 next. Break will further affirm the case that whole down trend from 2007 high of 251.90 is resuming for another low below 118.81. This will remain the preferred view as long as 150.68 resistance holds.

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