EUR/JPY edged higher to 124.53 last week but lost momentum after breaching 124.08 resistance. Considering bearish divergence condition in 4 hour MACD, a short term top could be in place. Initial bias is neutral stays neutral this week first. Break of 122.92 minor support will bring deeper pull back towards 38.2% retracement of 114.84 to 124.53 at 120.82 and bring rise resumption. We’re holding on to the view that whole rally from 109.03 is resuming. Break of 124.53 will target 126.09 key resistance next. Break there will pave the way to 100% projection of 109.03 to 124.08 from 114.84 at 129.89.
In the bigger picture, focus is back on 126.09 support turned resistance. Decisive break there will confirm completion of the down trend from 149.76. And in such case, rise from 109.20 is at the same degree and should target 141.04 resistance and above. Meanwhile, rejection from 126.09 and break of 114.84 will extend the fall from 149.76 through 109.20 low.
In the long term picture, medium term decline from 149.76 is seen as part of a long term sideway pattern from 88.96. We’re not seeing any sign of an established long term trend yet. Hence, we’ll be cautious on strong support at 94.11 in case of another fall. Also, there could be strong resistance at 149.76 in case of a medium term rise.