EUR/JPY dropped to as low as 127.50 last week but was supported above 126.88 and recovered strongly. Initial bias will remain neutral this week and some sideway trading could be seen. But still, another fall is in favor as long as 130.76 resistance holds. Below 127.50 will target a test of 126.88 support next. On the upside, however, break of 130.76 resistance will indicate that fall from 134.54 should have completed at 127.50 already and stronger rise should be seen to 134.54 and above to extend the rise from 126.88.
In the bigger picture, at this point, EUR/JPY is still bounded in medium term range between 126.88 and 139.21 and outlook remains neutral for the moment. On the downside, a break of 126.88 support will revive that case that medium term rebound from 112.10 has completed at 139.21 already. And down trend from 169.96 is resuming. In such case, we'd expect deeper fall to 112.10 and beyond to resume the long term down trend. On the upside, however, break of 134.54 resistance will revive that case that recent price actions are merely consolidations to medium term rise from 112.10 already and another high above 139.21 should be seen before EUR/JPY tops.
In the long term picture, up trend from 88.96 (00 low) has completed at 169.96 and made a long term top there. Subsequent price actions are either developing into resumption of the multi decade down trend from 285.56, or wide range corrective pattern. In either case, upside should be limited well below 169.96 high and we're expecting at least one more medium term fall after the current rise from 112.10 completes. The final structure of the rebound from 112.10 will provide more indication on whether a test on 88.96 low would be seen.