GBP/JPY Weekly Outlook

GBP/JPY's retreat from 208.99 was contained at 203.35 last week and rebounded strongly since that. Break of 206.09 minor resistance indicates that such retreat should have completed. Intraday bias is flipped back to the upside for 208.99 resistance first and bring will confirm whole rebound from 192.60 has resumed. As discussed before, sustained trading above the short term falling channel resistance confirms that decline from 241.35 has already completed at 192.60. Further rally is expected to 210.56/211.22 resistance zone (100% projection of 192.60 to 205.09 from 198.07 at 210.56 and 38.2% retracement of 241.35 to 192.60 at 211.22). On the downside, though, below 205.29 minor support will argue that there should be one more fall to below 203.35 before completing the consolidation from 208.999 and rally resumption.

In the bigger picture, while, fall from 241.35 has completed at 192.60, there is no confirmation of the completion of whole down trend from 251.09 yet. Focus is now on the structure of the current rise from 192.60 as well as 219.32 medium term support turned resistance. Though, a break of 198.07 is now needed to shift short term bias back to the downside for retesting 192.60 low. Otherwise, further upside is still in favor, at least in short term.

In the longer term picture, whole up trend from 148.19 have ended at 251.09 already. At the moment, the favored case is that price actions from 129.32 (95 low) has completed a three wave consolidation up to 251.09. Hence, the downtrend from 251.09 is in favor to extend further to long term rising trend line support (now at 174.25) even if the current rebound from 192.60 is much stronger than expected.

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