EUR/JPY edged higher to 114.15 last week but failed to sustain above 114.00 resistance and turned sideway. The development indicates that consolidations from 114.00 is likely still in progress. Below 112.22 should start the third leg of the consolidation to 110.77 support and possibly below. Though, downside is expected to be contained above 109.56 cluster support (61.8% retracement of 106.81 to 114.00 at 109.55) and bring rally resumption. On the upside, decisive break of 114.15 will target 115.65 resistance next.
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 be targeting 115.65 resistance and above. However, we'd expect strong resistance at 38.2% retracement of 139.21 to 105.42 at 118.33 to limit upside 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.