GBP/JPY Weekly Outlook

GBP/JPY dipped further to 209.39 last week but turned into choppy sideway consolidation since then. The corrective nature of price actions from 209.39 argues that it's merely consolidation to the fall from 213.91 only. Also, as mentioned before, failure to sustain above 213.48 key medium term resistance, and bearish divergence conditions in 4 hours MACD and RSI argues that at least a short term top is possibly in place. Below 209.39 will indicate that such decline from 213.91 has resumed for 203.96 support first. On the upside, above 212.32 will encourage a retest of 231.91 high. Nevertheless, firm break above 213.91 is needed to revive short term bullishness. Otherwise, risk remains mildly on the downside.

In the bigger picture, a medium term bottom is in place at 192.60. At this moment, there is no confirmation of completion of the rebound from there yet. Though, break of the mentioned short term trend line support will be the first signal that rally from 192.60 has finished. Further break of 199.78 support confirm such case, and focus will be back to 192.60 low. On the upside, above 213.91 will confirm the such rebound is still in progress towards 221.25 medium term support turned resistance.

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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