EUR/JPY dived to as low as 116.56 last week but turned sideway since then. Initial bias remains neutral this week for some more consolidations first. In case of another recovery, upside should be limited by 119.58 resistance to bring fall resumption. On the downside, break of 116.56 will resume larger down trend to 114.84 medium term support next.
In the bigger picture, down trend from 137.49 (2018 high) 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 123.35 resistance is needed to the first sign 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 should now extend this falling leg through 109.48 (2016 low). With EUR/JPY staying below 55 month EMA, this is the preferred case.