Despite recovering to 129.62, EUR/JPY’s subsequent sharp fall retains near term bearishness. Initial bias is now on the downside this week for 127.36 support first. Break there will resume larger pattern from 134.11 and target 126.58 medium term fibonacci level. On the upside, above 129.62 will turn bias back to the upside to bring another rebound.
In the bigger picture, as long as 38.2% retracement of 114.42 (2020 low) to 134.11 at 126.58 holds, up trend from 114.42 is still in favor to continue. Break of 134.11 will target long term resistance at 137.49 (2018 high). However, sustained break of 126.58 will raise the chance of medium term bearish reversal. In this case, deeper decline would be seen to 61.8% retracement at 121.94, and possibly below.
In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Long term outlook will remain neutral until breakout from the range of 109.03/137.49.
