GBP/JPY’s rise from 180.00 resumed last week but formed a temporary top at 198.41. Initial bias remains neutral this week for consolidations first. Further rally is expected as long as 193.69 support holds. On the upside, sustained trading above 61.8% retracement of 208.09 to 180.00 at 197.35 will target 208.09 high next.
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, considering bearish divergence condition in W MACD, 208.09 is at least a medium term top. It’s still early to conclude that the up trend from 122.75 (2016 low) has completed. But it’s at least in a medium term corrective phase, with risk of correction to 55 M EMA (now at 171.17).
