EUR/JPY’s rebound from 115.86 resumed last week and reached as high as 121.35. Initial bias stays on the upside this week with focus on 100% projection of 115.86 to 120.01 from 117.07 at 121.16. Sustained break there will pave the way to 161.8% projection at 123.78. On the downside, below 120.33 minor support will turn intraday bias neutral and bring consolidations, before staging another rally.
In the bigger picture, current development argues that a medium term bottom is formed at 115.86, on bullish convergence condition in daily MACD, ahead of 114.84 support. Decisive of 120.78 support turned resistance will affirm this case and bring further rise to falling channel resistance (now at 126.00). Reactions from there would decide whether the medium term has reversed. For now, further rise is expected as long as 117.07 support holds.
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. This falling leg would target 109.48 (2016 low). With EUR/JPY staying below 55 month EMA, this is the preferred case.
