GBP/JPY stayed in range trading below 193.72 last week and outlook is unchanged. Initial bias remains neutral this week and further rally is in favor with 189.97 support intact. On the upside, break of 193.72 will resume the rise from 184.35 to 195.95 resistance next. However, firm break of 189.97 will turn bias back to the downside for deeper decline.
In the bigger picture, price actions from 208.09 are seen as a correction to rally from 123.94 (2020 low). Strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. However, sustained break of 175.94 will bring deeper fall even still as a correction.
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 175.85).
