GBP/JPY Weekly Outlook

GBP/JPY's sharp decline last week and break of the short term rising trend line suggests that rally from 192.60 could have completed at 208.99 already. Initial bias remains on the downside this week and focus will be turned to 198.07.support. Break will confirm this case and bring deeper fall to retest 192.60 low. On the upside, though, above 203.31 will turn intraday outlook neutral first.

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. Break of 198.07 support will firstly confirm that rise from 192.60 has completed after meeting correction target of 204.49/213.48 resistance zone. Secondly, the corrective structure of the rise from 192.60 to 208.99 will confirm that it's merely a correction to the medium term down trend only. In other words, whole down trend from 251.09 is probably ready to resume in such case. However, strong rebound from 198.07 will argue that correction from 192.60 is not finished yet and another rise could be seen to 38.2% retracement of 241.35 to 192.60 at 211.22 before completion.

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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