GBP/JPY Daily Outlook

Daily Pivots: (S1) 135.39; (P) 136.66; (R1) 137.53; More

GBP/JPY's break of 136.12 minor support suggests that an intraday top is already in place at 138.04 and turns bias neutral. Further break of 133.89 support will indicate that choppy recovery from 132.13 has completed and recent down trend might then be resuming for 118.81 low. On the upside, above 138.04 will delay the bearish case and bring more recovery first. But after all, upside is expected to be limited by 139.21 cluster resistance (38.2% retracement of 150.68 to 132.13 at 139.21, 61.8% retracement of 143.59 to 132.13 at 139.21) and bring fall resumption.

In the bigger picture, while the rebound from 132.13 was strong, there is no change in the bearish outlook. 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. Decline from 163.05 is tentatively treated as resumption of the long term down trend from 2007 high of 251.09 and should target a new low below 118.81. On the upside, decisive break of 143.59 cluster resistance (61.8% retracement of 150.68 to 132.13 at 143.59) is needed to invalidate this view. Otherwise, outlook will remain bearish.

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