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GBP/JPY– The cross continues to face downside weakness following through on the back of previous week losses and increasing the risk of further declines. This development now leaves GBPJPY targeting the 130.19 level, its Mar 23’2011 low where break will open the door for further weakness towards the 129.15 level, its .618 Fib Ret (122.40-139.99 rally).

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We look for a combination of the 130.19/129.15 zone to provide a strong support and turn the cross back up if tested. However, if that zone is taken out, further weakness is likely to occur towards the 127.52 level, its Mar 18’2011 low followed by the 122.40 level, its 2011 low. Its weekly studies are bearish and pointing lower supporting this view  

Conversely, for the cross to reduce its present bearishness it will have to break and close above 134.04 level, its May 11’2011 high. Further out, the 136.96 level, its April 28’2011 high and the 139.99 level, its 2011 high will be targeted with a clearance of the latter setting the stage for a run the 142.00 level, its psycho level. On the whole, GBPJPY remains vulnerable to the downside into the near week.