GBP/JPY’s break of 133.98 resistance last week argue that fall from 139.73 might have completed at 131.68. Initial bias is mildly on the upside for 136.34 resistance first. Break will confirm this case and bring retest of 139.73 high. Though, break of 131.95 support would resume the decline through 131.68 to 129.27 key support.
In the bigger picture, we’re seeing price actions from 122.75 (2016 low) as a sideway consolidation pattern. As long as 147.95 resistance holds, an eventual downside breakout remains in favor. However, firm break of 147.95 will raise the chance of long term bullish reversal. Focus will then be turned to 156.59 resistance for confirmation.
In the longer term picture, repeated rejection by 55 month EMA indicate long term bearishness in the cross. Down trend from 251.09 (2007 high) should eventually resume through 122.75 to 116.83 (2011 low) and below. However, sustained break of 55 month EMA (now at 144.87) will dampen this view and could open up further rise back to 195.86 (2015 high).
