EUR/JPY's down trend resumed last week but taking out 120.69 and dived to as low as 119.64. Nevertheless, late recovery suggests that we should see some consolidations first before having another fall in the cross. Initial bias is neutral and EUR/JPY would continue to trade sideway. But upside should be limited by 122.60 and bring fall resumption. Below 119.64 will target 61.8% projection of 134.36 to 120.69 from 125.22 at 116.77 next.
In the bigger picture, development is so far inline with our bearish view. 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 long term down trend and should target a new low below 112.10. On the upside, break of 125.22 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.