GBP/JPY rebounded strongly after initial dive to 120.82 last week. The sustained trading above 4 hours 55 EMA argues that choppy decline from 125.82 has finished already. Initial bias remains mildly on the upside for 123.79 resistance. Decisive break there will confirm this bullish case. More importantly, it will argue that whole rebound from 118.82 is resuming for 125.82 and above. On the downside, below 122.45 minor support will flip bias back to the downside for 120.82 instead.
In the bigger picture, there was so far no impulsive upside move after GBP/JPY formed a medium term bottom at 116.83. On the other hand, there was no sustainable selling neither. The development argues that even though there is no clear sign of trend reversal in GBP/JPY, it's more likely engaging in sideway consolidations, which corrects fall from 163.05. That is, we'd probably see more range trading between 116.83 and 140.02 (50% retracement of 163.05 to 116.83 at 139.94) ahead, before an eventual downside breakout.
In the longer term picture, fall from 251.09 is treated as resumption of multi decade down trend. Current development gives no indication of medium term reversal yet and GBP/JPY would likely drop towards 100 psychological level on down trend resumption.
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