EUR/JPY's rally continue last week as expected and surged to as high as 103.02. The strong break of upper channel resistance showed acceleration. Initial bias remains on the upside and current rise should now target 61.8% retracement of 111.43 to 94.11 at 104.81 next. On the downside, below 10.98 minor support will turn bias neutral and bring consolidations. But retreat should be contained well above 99.52 support and bring rally resumption.

In the bigger picture, current development continues to affirm the view that whole down trend form 169.96 (2008 high) has completed at 94.11. Focus is now on 111.43 key resistance level. Break will confirm this case and bring stronger rebound back to 123.31 resistance and above. We'd favor this bullish scenario as long as 99.52 support holds.

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 from 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.

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