EUR/JPY struggled in tight range last week and outlook is unchanged. Initial bias remains neutral this week first. On the downside, break of 131.21 support will likely extend the correction from 134.11 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. On the upside, break of 132.68 will bring retest of 134.11 high instead.
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.