Daily Pivots: (S1) 139.92; (P) 140.75; (R1) 142.33; More….
GBP/JPY’s rebound from 138.65 extends higher to but and break of near term falling channel suggests reversal. Focus is back on 142.75 minor resistance. Break will confirm and turn bias to the upside for retesting 148.09. Below 138.65 will extend the fall from 148.09. In that case, we’d look for bottoming signal around 135.58, which is close to 135.39 fibonacci level, to bring rebound.
In the bigger picture, while the fall from 148.09 is deeper than expected, we’re not bearish in the cross yet. Price action from 148.42 is possibly developing into a sideway pattern with fall from 148.09 as the third leg. Deeper decline could be seen but we’re looking for strong support from 135.58 and 50% retracement of 122.36 to 148.42 at 135.39 to contain downside. Rise from 122.36 is still mildly in favor to resume at a later stage. However, sustained break of 135.58/39 will confirm reversal and target a retest on 122.36 low.