EUR/JPY dipped to 108.01 last week before forming a temporary low there and recovered. The development affirmed the case that recent fall from 123.31 is still in progress. While some consolidations could be seen initially this week, we'd expect upside to be limited by 111.23 minor resistance and bring fall resumption. Below 108.01 will target 105.42/106.28 support zone first. On the upside, above 111.23 will turn bias neutral and bring stronger rebound. But after all, we'd stay bearish as long as 114.17 resistance holds and expect more downside ahead.
In the bigger picture, current development suggests that rebound from 105.42 medium term bottom was merely a correction and has completed at 123.31 already. Whole down trend from 2008 high of 169.96 was not finished yet and should extend beyond 105.42. Also, as weekly MACD will most likely break its trend line as the current fall from 123.31 extends, EUR/JPY is possibly regaining medium term downside momentum too. Break of 105.42 will target 61.8% projection of 139.21 to 105.42 from 123.31 at 102.42 first. Though, note that break of 123.31 resistance will in turn revive the case that the medium term trend has reversed and will turn focus back to 139.21 resistance instead.
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. Current development raised the possibility that the 105.42 is not yet the bottom. In case of another fall, we'll continue to look for reversal signal ahead of 88.96 low.