EUR/JPY fell sharply to as low as 110.69 last week before recovering. The break of 112.10 low indicates that long term down trend is resuming. Hence, while some sideway trading might be seen initially this week, we'd expect upside to be limited by 61.8% retracement of 125.95 to 110.69 at 120.12 and bring fall resumption. Below 114.60 minor support will turn intraday bias back to the downside. Further break of 110.69 will target 61.8% projection of 169.96 to 112.10 from 139.21 at 103.45 next.
In the bigger picture, the break of 112.10 support indicates that whole long term down trend from 2008 high of 169.96 has resumed. Outlook will now remain bearish as long as 127.88 resistance holds and further fall should be seen to 61.8% projection of 169.96 to 112.10 from 139.21 at 103.45 which is close to 100 psychological level. However, note that we're slightly favoring the case that fall from 169.96 is corrective in nature. Hence, we'll start to watch out for reversal signal between 2000 low of 88.96 and 100 psychological level.
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. The third falling leg is now in progress but would be contained above 88.96 key support level. We'll hold on this this view unless fall from 169.96 shows sign of acceleration.