EUR/JPY's rebound from 106.81 extended further last week and the break of 112.18 resistance confirmed that choppy fall from 115.65 is finished. Initial bias remains on the upside this week for 115.65 first. Break will target 100% projection of 105.42 to 115.65 from 106.81 at 117.04 next. On the downside, below 111.62 minor support will turn intraday bias neutral and bring retreat. But another rise will now remains in favor as long as 109.56 support holds.

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 of such consolidations 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 to limit up side and bring down trend resumption. On the downside, below 109.56 support, though, will turn focus back to 105.42 low instead.

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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