EUR/JPY recovered strongly last week but failed to break through 132.63 support turned resistance decisively. Initial bias remains neutral this week first. On the upside, firm break of 132.63 should confirm completion of correction from 134.11. Intraday bias will be turned back to the upside for retesting 134.11 first. On the downside, below 131.21 minor support will extend the correction through 130.02. But in this case, we’d expect strong support from 38.2% retracement of 121.63 to 134.11 at 129.34 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. Next target is 137.49 (2018 high). Decisive break there will open up the possibility that it’s indeed resuming the up trend from 94.11 (2012 low). For now, outlook will stay bullish as long as 127.07 resistance turned support holds, in case of pull back.
In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Another rising leg in progress for 137.49 resistance and above.