EUR/JPY edged higher to 113.30 last week but lost momentum ahead of 114.13 resistance and turned sideway. Initial bias is neutral this week and some more sideway trading might be seen first. On the downside, break of 110.85 minor support will indicate that recovery from 108.06 is finished and will flip bias back to the downside for retesting this low. Break 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, upside should be limited by mentioned 114.13 and bring fall resumption. However, strong break of 114.13 will confirm that EUR/JPY has already formed a short term bottom and should bring stronger rise towards 55 days EMA (now at 116.19) next.

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 medium term 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.

EUR/JPY

EUR/JPY

EUR/JPY