EUR/JPY’s rally continued last week and reached as high as 126.75. As a temporary top was formed there, initial bias is neutral this week first. Outlook will remain bullish as long as 124.31 support holds. Break of 126.75 will target 100% projection of 114.42 to 124.43 from 119.31 at 129.32. Nevertheless, break of 124.31 will indicate short term topping and turn bias to the downside for pull back.
In the bigger picture, whole down trend from 137.49 (2018 high) could have completed at 114.42 already. Rise from 114.42 would target 61.8% retracement of 137.49 to 114.42 at 128.67 next. Sustained break there will pave the way to 137.49 (2018 high). This will remain the preferred case for now, as long as 55 day EMA (now at 122.54) holds. However, sustained break of 55 day EMA will revive medium term bearishness for another low below 114.42 at a later stage.
In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Sustained break of 55 month EMA (now at 124.54) should confirm the start of another medium term rising leg.
