EUR/JPY failed to take out 101.62 resistance last week but reversed and dropped sharply to as low as 97.63. The development indicates that corrective rise from 95.64 has completed at 101.62 already. Initial bias remains on the downside this week for a test on 95.64 first. Break will confirm resumption of whole fall from 111.43. However, above 99.10 minor resistance will mix up near term outlook and turn bias neutral again.
In the bigger picture, with 111.43 resistance intact, the down trend from 2008 high of 169.96 is still in progress and could extend further lower to 90 psychological level. However, as we're favoring the case that pattern from 139.21 is a falling wedge with bullish convergence condition in weekly MACD. Fall from 111.43 should be the last leg in such pattern. Hence, we'll expect strong support above 88.96 to contain downside, form a major bottom and bring reversal. So, focus will be on reversal signal in case of another decline. Meanwhile, break of 104.61 will be the first signal of reversal while further break of 111.43 should confirm.
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. Reversal should be around the corner considering bullish convergence condition in monthly MACD.