EUR/JPY edged higher to 133.08 last week but continued to lose upside momentum, as seen in 4 hour MACD. Breach of 132.10 minor support argues that corrective rebound from 128.94 could have completed. Initial bias is turned to the downside this week for retesting 128.94 low. On the upside, above 133.08 will extend such rebound. But upside will likely be limited by 61.8% retracement of 137.49 to 128.94 at 134.22 and below.
In the bigger picture, price action from 137.49 medium term top are developing into a corrective pattern. Strong support from 55 week EMA (now at 129.91) suggests that the first leg has completed at 128.94 already. Nonetheless, break of 137.49 is needed to confirm resumption of the rise from 109.03 (2016 low). Otherwise, we’d expect more corrective range trading, with risk of another fall to 38.2% retracement of 109.03 to 137.49 at 126.61 before completion.
In the long term picture, at this point, EUR/JPY is staying in long term sideway pattern. established since 2000. Rise from 109.03 is seen as a leg inside the pattern. As long as 124.08 support holds, further rally is in favor in medium to long term through 149.76 high. However, break of 124.08 could extend the fall through 109.03 low instead.