EUR/JPY dipped to 129.76 last week but quickly recovered, initial bias is neutral this week first. On the downside break of 129.59 minor support will argue that rebound from 127.36 has completed and turn bias back to the downside for this support. On the upside, break of 131.59 resistance will reaffirm the bullish case that consolidation from 134.11 could have completed with three waves down to 127.36, ahead of 126.58 medium term fibonacci level. Further rally would then be seen to retest 133.44/134.11 resistance zone.
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.
