EUR/JPY turned into sideway consolidation last week. Initial bias remains neutral this week first. Break of 127.36 will resume larger fall to 126.58 medium term fibonacci level. We’d look for some support from there to bring rebound. But sustained break of 126.58 will carry larger bearish implications. On the upside, break of 129.09 will extend the rebound to 55 day EMA (now at 129.66) and above.
In the bigger picture, as long as 38.2% retracement of 114.42 (2020 low) to 134.11 at 126.58 holds, up trend from 114.42 is still in favor to continue. Break of 134.11 will target long term resistance at 137.49 (2018 high). However, sustained break of 126.58 will raise the chance of medium term bearish reversal. In this case, deeper decline would be seen to 61.8% retracement at 121.94, and possibly below.
In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Long term outlook will remain neutral until breakout from the range of 109.03/137.49.