GBP/JPY Daily Outlook

Daily Pivots: (S1) 125.41; (P) 126.03; (R1) 126.42; More

Another rise remains in favor in GBP/JPY with 124.49 minor support intact. Current rally could extend to 127.30 resistance, which is close to 161.8% projection of 117.29 to 122.04 from 119.58 at 127.26. At noted before, we're treating rebound from 117.29 as the third leg of consolidation pattern from 116.83. Hence, we'd expect upside to be limited by 50% retracement of 140.02 to 116.83 at 128.42 to finish the consolidation and bring down trend resumption. Below 124.49 will flip bias back to the downside. Further break of 122.04 support will confirm near term reversal and target a test on 116.82 low next.

In the bigger picture, the choppy decline from 163.05 is viewed as part of the down trend from 251.09 and there is no clear sign of reversal yet. Such down trend is expected to continue after consolidation pattern from 116.83 finishes and target 110 psychological next. However, sustained break of above mentioned 128.42 will raise the odds that GBP/JPY has bottomed in medium term and will turn focus back to 140.20 resistance for confirmation.

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