EUR/JPY’s extended rebound last week suggests short term bottoming at 180.78. Fall from 186.86 might have completed after hitting 38.2% retracement of 172.24 to 186.86 at 181.27. Initial bias stays mildly on the upside this week for retesting 186.22/86 resistance zone. However, sustained break of 181.27 will argue that fall from 186.86 is correcting whole up trend from 154.77, and bring deeper decline.
In the bigger picture, considering bearish divergence condition in D MACD and break of 55 D EMA, a medium term top could be formed at 186.86 already. Deeper correction would be seen but downside should be contained by 38.2% retracement of 154.77 to 186.86 at 174.60 to bring rebound. Meanwhile, firm break of 186.86 will resume larger up trend to 78.6% projection of 124.37 to 175.41 from 154.77 at 194.88 next.
In the long term picture, up trend from 94.11 (2021 low) is in progress. Next target is 138.2% projection of 94.11 to 149.76 (2014 high) from 114.42 (2020 low) at 191.32. This will remain the favored case as long as 154.77 support holds.
