EUR/JPY edged lower to 117.67 last week. but turned into consolidation since then. Initial bias remains neutral this week first and some more sideway trading could be seen. In case of another recovery, upside should be limited below 120.05 support turned resistance to bring fall resumption. On the downside, break of 117.67 will resume recent fall from 127.50 to 114.84 support next.
In the bigger picture, down trend from 137.49 is still in progress. It’s seen as a falling leg of multi-year sideway pattern. Deeper fall could be seen to 109.48 (2016 low and below). On the upside, break of 127.50 resistance is needed to be the confirm medium term reversal. Otherwise, outlook will remain bearish in case of strong rebound.
In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Fall from 137.49 is seen as a falling leg inside the pattern. Break of 118.62 will extend this falling leg through 109.48 (2016 low). With EUR/JPY staying below 55 month EMA, this will remain the preferred case.
