GBP/JPY Daily Outlook

Daily Pivots: (S1) 136.99; (P) 137.78; (R1) 138.55; More

Intraday bias is turned neutral with 4 hours MACD crossed below signal line. GBP/JPY has made an intraday top at 139.33 after hitting mentioned 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). As noted before, choppy rise from 132.13 is treated as consolidation in the larger decline only and is expected to be limited by 139.21 resistance and such level is already met. Break of 135.18 minor support will flip intraday bias back to the downside. Further break of 132.13 low will confirm down trend resumption for 118.81 low. However, note that sustained break of 139.21 will dampen this view and bring stronger rebound to next cluster resistance at 143.59 instead.

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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