GBP/JPY retreated sharply after edging higher to 198.94 last week but stays above 194.04 support. Initial bias stays neutral this week first and outlook is unchanged. Corrective pattern from 180.00 is still extending. On the upside, above 199.79 will will target channel resistance (now at 203.90). However, firm break of 194.04 will turn bias to the downside for 188.07 support instead.
In the bigger picture, price actions from 208.09 are seen as a correction to whole rally from 123.94 (2020 low). The range of consolidation should be set between 38.2% retracement of 123.94 to 208.09 at 175.94 and 208.09. However, decisive break of 175.94 will argue that deeper correction is underway.
In the longer term picture, while a medium term top was formed at 208.09 (2024 high), it’s still early to conclude that the up trend from 122.75 (2016 low) has completed. But GBP/JPY is at least in a medium term corrective phase, with risk of correction to 55 M EMA (now at 173.52).
. However, firm break of 194.04 will turn bias to the downside for 188.07 support instead.){kind=link}