EUR/JPY's recovery extended to 125.25 last week but dropped sharply since then. The development argues that recovery from 120.69 has already completed and recent decline might be ready to resume. Initial bias is cautiously on the downside this week for 120.69 support first. Break there will confirm fall resumption and should target 100% projection of 134.36 to 124.73 from 126.96 at 117.33 next. On the upside, however, above 123.10 minor resistance will delay the bearish case and argues that more sideway consolidations would be seen first. Nevertheless, even in case of another rise, upside should be limited by 124.73/126.96 resistance zone and bring another fall.
In the bigger picture, medium term rebound from 112.10, which is treated as a correction to long term down trend from 2008 high of 169.96, should have completed at 139.21 already, after multiple failure to sustain above 55 weeks EMA. Current decline is tentatively treated as resumption of the down trend and should target a new low below 112.10. On the upside, break of 126.88 support turned resistance is needed to be the first signal of bottoming. Otherwise, medium term outlook will remain bearish.
In the long term picture, up trend from 88.96 (00 low) has completed at 169.96 and made a long term top there. Fall from 169.96 should develop into a three wave correction with first wave completed at 112.10, second wave completed at 139.21. Current fall is likely the third wave and should extend beyond to 61.8% projection of 169.96 to 112.21 from 139.21 at 103.45 or further to 100 psychological support next.