EUR/JPY’s corrective decline from 134.11 resumed to as low as 129.60 last week but rebounded strongly since then. Initial bias is neutral this week first. In case of another fall, 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 131.02 resistance will indicate short term bottoming, on bullish convergence condition in 4 hour MACD. Strong rise should be seen to 132.68 resistance and above.
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.