EUR/JPY dropped sharply to as low as 109.22 last week and the development indicates that rebound from 107.30 is completed at 114.72 already. We'd stay bearish as long as 112.03 resistance holds and expect another fall after finishing the consolidation from 109.22. Break of 109.22 will target another low below 107.30. On the upside, however, above 112.02 will indicate that consolidation from 107.30 is still in progress and another high above 114.72 might then be seen before long term down trend resumption.
In the bigger picture, whole fall from 139.21 is viewed as resumption of long term down trend from 2007 high of 169.96 and is still in progress. Fall from 114.72 is tentative treated as resuming of such down trend 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 after taking out 107.30 low. 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, which is close to 38.2% retracement of 139.21 to 107.30 at 119.48, 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.