EUR/JPY climbed further to as high as 113.36 last week but lost momentum ahead of 113.40 resistance. With 4 hours MACD staying below signal line, initial bias will be neutral this week. Break of 110.66 will suggest that recovery from 107.30 is finished and flip intraday bias back to the downside. Also, this will reaffirm the case that EUR/JPY has not bottomed yet and recent down trend from 139.21 is still in progress for another low below 107.30. On the upside, though, note that sustained trading above 113.40 resistance and 55 days EMA (now at 113.55) will indicate that a medium term bottom is formed at 107.30 and stronger rise would be seen towards 38.2% retracement of 139.21 to 107.30 at 119.48.

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 reversal. 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.