The rebound to 131.13 last week was brief. EUR/JPY drops sharply since then, through 129.10 support to close at 128.62. The development revives the case that corrective rebound from 124.61 has completed with three waves up to 131.97. Initial bias stays on the downside this week for 127.13 support first. Decisive break there will bring retest of 124.61 low. On the upside, above 129.52 minor resistance will turn intraday bias neutral first. But near term outlook will remain cautiously bearish as long as 131.13 resistance holds.
In the bigger picture, for now, EUR/JPY is still holding above 124.08 key support turned resistance. And the larger rise from 109.03 (2016 low) mildly in favor to resume. Break of 133.47 should send the cross through 137.49 high. However, decisive break of 124.08 will confirm medium term reversal and could then pave the way back to 109.03 low and below.
In the long term picture, at this point, EUR/JPY is staying in long term sideway pattern, established since 2000. Rise from 109.03 is seen as a leg inside the pattern. As long as 124.08 support holds, further rally is in favor in medium to long term through 149.76 high. However, break of 124.08 could extend the fall through 109.03 low instead.
