EUR/JPY dipped to 110.00 initially last week but rebounded strongly since then. Nevertheless, upside is still limited below 113.40 resistance. Hence, we'd slightly favor the case that the cross has not bottomed yet. Initial bias is neutral this week. On the downside, break of 110.00 will suggest that recovery from 107.30 has completed and will flip intraday bias back to the downside for retesting 107.30 and below. On the upside, however, sustained trading above 113.40 resistance will indicate that a medium term bottom is in place at 107.30 and would bring stronger rise towards 38.2% retracement of 139.21 to 107.30 at 119.48 instead.

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.

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