EUR/JPY’s decline from 130.86 extended last week and the development suggests that rebound form 124.89 might be completed. Initial bias stays mildly on the downside this week for 61.8% retracement of 124.89 to 130.86 at 127.17. Break will target a test on key support zone at 124.61/89. On the upside, though, break of 129.97 resistance will likely resume the rebound from 124,89 through 130.86.
In the bigger picture, as long as 124.08 key resistance turned support, larger up trend from 109.03 (2016 low) remains in favor to continue. Decisive break of 61.8% retracement of 137.49 to 124.61 at 132.56 will pave the way to retest 137.49 high. However, firm break of 124.08 will argue that whole rise from 109.03 (2016 low) has completed at 137.49. Deeper decline would be seen to 61.8% retracement of 109.03 to 137.49 at 119.90 next.
In the long term picture, at this point, EUR/JPY is staying in long term sideway pattern, established since 2000. Rise from 109.03 is seen as a leg inside the pattern. As long as 124.08 support holds, further rally is in favor in medium to long term through 149.76 high. However, break of 124.08 could extend the fall through 109.03 low instead.
