GBP/JPY Weekly Outlook

GBP/JPY's down trend accelerated last week to as low as 165.97, taking out long term rising trend line support decisively. From a short term angle, further decline is still expected as long as 176.39 resistance holds. Sustained break of 100% projection of 215.87 to 184.47 from 197.42 at 166.02 will encourage further fall to next projection level of 100% projection at 146.41, which is close to 148.19 medium term support. On the upside, above 176.39 will indicate that a short term bottom is formed and bring consolidation before staging another fall.

In the bigger picture, regardless of the interpretation of the fall from 251.09, the current decline from 215.87 should develop into a five wave decline and should target 148.19 support next. A break above 184.47 support turned resistance is needed to indicate that a medium term bottom is formed and bring consolidation larger scale consolidation. Otherwise, medium term outlook will remain bearish even in case of strong rebound.

In the longer term picture, as discussed before, whole rise from 129.32 (95 low) has completed with three waves up to 251.09 already. The corrective structure suggests that it's merely a consolidation in the longer term down trend and hence, much deeper decline is favor to at least test 148.19 (00 low) with odds of even further to 129.32.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box