EUR/JPY's rally resumed on broad based strength in Euro and jumped to as high as 115.96 last week. Initial bias remains on the upside, and further rise should be seen to 100% projection of 105.42 to 115.65 from 106.81 at 117.04. On the downside, below 114.15 minor support will turn bias neutral and bring consolidations. But near term outlook will remain bullish as long as 111.95 support holds.

In the bigger picture, price actions from 105.42 are treated as medium term consolidations to fall from 139.21. Rise from 106.81 is the third leg of such consolidations and might extend further higher. But, 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 111.95 support will be the first signal that such consolidation has completed and will turn outlook bearish for 105.42 low and below. However, sustained trading above 118.33 fibonacci level will dampen this view and turn focus to 139.21 resistance 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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