EUR/JPY reversed after dipping to 106.81 and subsequent strong rebound indicate that choppy fall from 115.65 is completed. Initial bias remains on the upside this week for 112.18 resistance first. Break will target 115.65 and above. On the downside, below 110.06 minor support will turn intraday bias neutral and bring consolidations. But downside should be contained by 4 hours 55 EMA (now at 108.93) and bring rally resumption.

In the bigger picture, price actions from 105.42 are treated as medium term consolidations to fall from 139.21. Current development suggests that rise from 106.81 is the third leg and should now be targeting 115.65 resistance and above. Though, we'd expect strong resistance at 38.2% retracement of 139.21 to 105.42 at 118.33 and bring down trend resumption. Though, break of 105.42 is needed to confirm or more consolidative treating would be seen first.

In the long term picture, up trend from 88.96 (00 low) has completed at 169.96 and made a long term top there. Based on the five wave structure of the rise from 88.96 to 169.96, we're favoring that fall from 169.96 is corrective in nature. It should develop into a three wave correction with first wave completed at 112.10, second wave completed at 139.21. There is no confirmation that the third wave is finished and such decline might still continue. But EUR/JPY would be contained above 88.96 key support level. We'll hold on to this view unless fall from 169.96 shows sign of acceleration.

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