EUR/JPY's rebound from 126.88 extended further to as high as 134.54 last week and closed strongly. Initial bias will remain on the upside this week and further rise should be seen to 135.68 resistance first and possibly further to upper side of the medium term range at 139.21. On the downside, below 132.48 will turn intraday bias neutral and bring some consolidations first.
In the bigger picture, the stronger than expected rebound from 126.88 mixes up the outlook again and shifts favor back to the case that EUR/JPY is still in sideway consolidation that started at 139.21, in range of 126.88/139.21. In other words, there is no confirmation that medium term rebound from 112.10 has completed. We'll stay neutral for the moment until a firm break of 126.88 or 139.21.
In the long term picture, up trend from 88.96 (00 low) has completed at 169.96 and made a long term top there. Subsequent price actions are either developing into resumption of the multi decade down trend from 285.56, or wide range corrective pattern. In either case, upside should be limited well below 169.96 high and we're expecting at least one more medium term fall after the current rise from 112.10 completes. The final structure of the rebound from 112.10 will provide more indication on whether a test on 88.96 low would be seen.