EUR/JPY's sharp recover on Friday and break of 109.76 minor support suggests that consolidation from 108.82 has completed at 114.13 already. Initial bias is on the downside this week and break of 108.82 will confirm down trend resumption for 61.8% projection of 169.96 to 112.10 from 139.21 at 103.45 next. On the upside, in case of another rise, we'd expect strong resistance at 38.2% retracement of 127.88 to 108.82 at 116.10 to conclude the consolidation and bring fall resumption finally.
In the bigger picture, fall from 139.21 is treated as resumption of long term down trend from 2007 high of 169.96 and should target 61.8% projection of 169.96 to 112.10 from 139.21 at 103.45 which is close to 100 psychological level. Though, we'd expect strong support between 2000 low of 88.96 and 100 psychological level to contain downside and bring reversal. On the upside, break of 119.64 support turned resistance is needed to be the first signal of bottoming. Otherwise, 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. 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.