EUR/JPY's rebound from 94.11 resumed by taking out 97.81 and reached as high as 98.40. Initial bias remains on the upside this week. The current rebound should at least be a correction to fall from 111.43. Break of the upper trendline resistance (now at 98.40) will indicate acceleration and would send EUR/JPY further higher towards 38.2% retracement of 111.43 to 94.11 at 110.72 next. On the downside, break of 95.71 support is needed to indicate completion of such rebound. Otherwise, we'll stay cautiously bullish in near term and expect further upside ahead.
In the bigger picture, there is no clear sign of reversal yet and the down trend from 2008 high of 169.96 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 remain on reversal signal. Meanwhile, break of 101.62 resistance will be an early sign of medium term bottoming and will turn focus back to 111.43 key resistance for confirmation.
In the long term picture, the down trend from 169.96 is viewed as a corrective move even though it's very deep comparing to the rise fro 88.96 (00 low). It could either be a correction or part of a consolidation pattern but that's not too relevant as the range of 88.96/169/.96 is so large. The relevant point is that we don't anticipate a break of 88.96 low. And hence, reversal should be around the corner.