EUR/JPY turned into sideway consolidation last week but outlook is unchanged. Initial bias remains neutral this week first. As long as 125.08 resistance holds, the corrective decline from 127.07 is still expected to extend lower. On the downside, break of 121.63 will target 61.8% retracement of 114.42 to 127.07 at 119.25, which is close to 119.31 key support. We’d look for strong support there to contain downside to bring rebound.
In the bigger picture, rise from 114.42 is seen as a medium term rising leg inside a long term sideway pattern. Further rise is expected as long as 119.31 support holds. Break of 127.07 will target 61.8% retracement of 137.49 (2018 high) to 114.42 at 128.67 next. However, firm break of 119.31 will argue that the rise from 114.42 has completed and turn focus back to this low.
In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Another rising leg could have started for 137.49 resistance and above.