EUR/JPY’s sharp decline last week suggests that a short term top was formed at 124.43. Further decline would be in favor this week as long as 122.51 minor resistance holds. Firm break of 38.2% retracement of 114.42 to 124.43 at 120.60 will pave the way to 61.8% retracement at 118.24. On the upside, though, break of 122.51 minor resistance will turn bias back to the upside for retesting 124.43.
In the bigger picture, whole down trend from 137.49 (2018 high) could have completed at 114.42 already. Rise from 114.42 would target 61.8% retracement of 137.49 to 114.42 at 128.67 next. Sustained break there will pave the way to 137.59 (2018 high). This will remain the preferred case for now, as long as 55 day EMA (now at 118.89) holds. However, sustained break of 55 day EMA will revive medium term bearishness for another low below 114.42 at a later stage.
In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Sustained break of 55 month EMA (now at 124.62) should confirm the start of another medium term rising leg. In this case, we’d tentatively look at 100% projection of 109.48 to 137.49 from 114.42 at 142.43 as the medium term target.
