EUR/JPY’s rebound from 127.91 extended higher last week. A short term bottom should be in place on bullish convergence condition in 4 hour MACD. Initial bias stays mildly on the upside this week for 130.54 resistance first. Sustained break there will argue that whole correction from 134.11 has completed and turn near term outlook bullish. Nevertheless, on the downside, below 128.58 minor support will turn bias back to the downside for retesting 127.91 low instead. Break will target 127.07 resistance turned support. That is close to 38.2% retracement of 114.42 to 134.11 at 126.58.
In the bigger picture, rise from 114.42 is seen as a medium term rising leg inside a long term sideway pattern. As long as 127.07 resistance turned support holds, further rise is still expected to retest 137.49 (2018 high). However, firm break of 127.07 will argue that the medium term trend has reversed, deeper fall would be seen to 61.8% retracement of 114.42 to 134.11 at 121.94.
In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Another rising leg in progress for 137.49 resistance and above.
