EUR/JPY surges to as high as 136.63 last week last week as medium term up trend resumes. As a temporary top is likely formed, initial bias is neutral this week first. But downside of retreat should be contained by 134.39 resistance turned support to bring another ally. Above 136.63 will extend the up trend towards 61.8% projection of 114.84 to 134.39 from 132.04 at 144.12.
In the bigger picture, medium term rise from 109.03 (2016 low) is seen as at the same degree as the down trend from 149.76 (2014 high) to 109.03 (2016 low). It should now be targeting 141.04/149.76 resistance zone. On the downside, break of 132.04 support is needed to be the first sign of medium term reversal. Otherwise, outlook will stay bullish in case of pull back.
In the long term picture, at this point, there is no clear indication that rise from 109.03 is resuming that from 94.11 (2012 low). Hence, we’d be cautious on topping below 149.76 to extend range trading. Nonetheless, firm break of 149.76 will indicates strong underlying buying. In such case, EUR/JPY will target 100% projection of 94.11 to 149.76 from 109.03 at 164.68.
