GBP/JPY retreated sharply after edging higher to 208.09 last week. Considering bearish divergence condition in 4H MACD, a short term top should be in place. Deeper pullback could be seen through 203.82 temporary low. But downside should be contained by 38.2% retracement of 191.34 to 208.09 at 201.69 to bring rebound, and set the range of consolidations. However, sustained break of 201.69 will argue that larger correction is already underway.
In the bigger picture, as long as 200.72 resistance turned support holds, the long term up trend should still be in progress. Next target is 100% projection of 155.33 to 188.63 from 178.32 at 211.62. However, firm break of 200.72 will suggest that it’s already in larger scale correction.
In the longer term picture, rise from 122.75 (2016 low) is seen as the third leg of the pattern from 116.83 (2011 low). Next target is 138.2% projection of 116.83 to 195.86 from 122.75 at 231.96. Outlook will stay bullish as long as 178.32 support holds, or until a clear reversal pattern forms.
