EUR/JPY recovered to 125.23 last week but failed to sustain above 4 hour 55 EMA and reversed. The development is inline with the view that fall from 126.79, which is the third leg of pattern from 127.50, is still in progress. Initial bias stays neutral this week first with focus on 124.09. Break there will turn bias to the downside for 123.65 and below. On the upside, however, break of 125.23 resistance will now suggest short term bottoming and turn bias back to the upside.
In the bigger picture, there is no confirmation of completion of the down trend from 137.49 (2018 high) yet. Break of 123.39 support will favor of down trend extension and target 118.62 low. However, break of 127.50 will solidify the case of medium term bullish reversal. Further decisive break medium term channel resistance will affirm reversal and target 133.12 key resistance and above.
In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Fall from 137.49 is seen as a falling leg inside the pattern. Break of 118.62 will extend this falling leg through 109.03 low. On the upside, break of 133.12 resistance bring retest of 149.76 (2014 high).
