EUR/JPY engaged in choppy sideway trading above 108.01 short term bottom last week. Late recovery argues that the larger decline from 123.31 is not ready to resume yet and initial bias is neutral this week. Above 111.04 will bring another recovery. But after all, we'll stay bearish in the cross as long as 114.17 resistance holds and expect and eventual downside breakout. Below 109.01 will bring another fall attempt. Break of 108.01 will confirm decline resumption for 105.42/106.28 support zone.

In the bigger picture, rebound from 105.42 medium term bottom was merely a correction and has completed at 123.31 already. Whole down trend from 2008 high of 169.96 was not finished yet and should extend beyond 105.42. Also, as weekly MACD is breaking its trend line, EUR/JPY is possibly regaining medium term downside momentum too. Break of 105.42 will target 61.8% projection of 139.21 to 105.42 from 123.31 at 102.42 first. Though, note that break of 123.31 resistance will in turn revive the case that the medium term trend has reversed and will turn focus back 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. Current development raised the possibility that the 105.42 is not yet the bottom. In case of another fall, we'll continue to look for reversal signal ahead of 88.96 low.

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