GBP/JPY Daily Outlook

Daily Pivots: (S1) 120.48; (P) 121.09; (R1) 121.73;

We're still favoring the case that GBP/JPY's corrective rise from 116.83 has finished at 122.63 already. Hence we're expecting fall from 122.63 to continue sooner or later by taking out 119.98 to retest 116.83 next. Nevertheless, break of 112.63 will invalidate this bearish view and extend the rise form 116.83 to 161.8% projection of 116.83 to 120.78 from 116.96 at 123.35 and above. Though, we'd expect strong resistance from 125.48/68 cluster resistance (61.8% retracement of 130.83 to 116.83 at 125.48, 38.2% retracement of 140.02 to 116..83 at 125.68) to limit upside to conclude the corrective rise and bring down trend resumption.

In the bigger picture, fall from 163.05 is part of the long term down trend from 2007 high of 251.09 and is still in progress. Next target will be 61.8% projection of 215.87 to 118.81 from 163.05 at 103.06, which is close to 100 psychological level. On the upside, break of 130.83 resistance is needed to be the first signal of medium term reversal. Otherwise, outlook will remain bearish even in case of strong rebound.

Please see the attached chart below.