GBP/JPY’s decline from 156.59 resumed last week and reached as low as 144.97. Initial bias remains on the downside this week for 143.51 medium term fibonacci level next. On the upside, above 147.47 minor resistance will turn intraday bias neutral first. But outlook will remain bearish as long as 150.92 resistance holds, in case of recovery.
In the bigger picture, the case for medium term reversal continues to build up. There is bearish divergence condition in daily MACD. 146.96 support was taken out. And GBP/JPY was rejected by 55 month EMA. Break of 38.2% retracement of 122.36 to 156.59 at 143.51 will pave the way to 61.8% retracement at 135.43 and below. This will now be the preferred case as long as 150.92 resistance holds.
In the longer term picture, rejection from 55 month EEMA (now at 154.20) argues that medium term rebound from 122.36 might be completed. And, the corrective structure also carries some bearish implication today. Sustained break of 135.58 key support will likely bring retest of 122.36 low, with prospect of resuming the long term down trend from 195.86 (2015 high).
