EUR/JPY’s fall from 120.01 extended lower last week and outlook is unchanged. Corrective recovery from 115.86 should have completed at 120.01. Initial bias stays on the downside for retesting 115.86 low. On the upside, above 118.47 minor resistance will turn bias back to the upside for 120.01 resistance instead.
In the bigger picture, as long as 120.78 support turned resistance holds, down trend from 137.49 (2018 high) should still be in progress. Break of 115.86 will target 109.48 (2016 low) and below. However, sustained break of 120.78 will be the first indication of medium term reversal. Further rise would then be seen to 127.50 resistance for confirmation.
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. This falling leg would target 109.48 (2016 low). With EUR/JPY staying below 55 month EMA, this is the preferred case.
