EUR/JPY's fall from 124.08 continued last week and reached as low as 115.19. The development is consistent with our view that corrective rise from 109.20 has completed at 124.08. And further fall is expected to retest 109.20.
Initial bias in EUR/JPY remains on the downside this week for 61.8% retracement of 109.20 to 124.08 at 114.88. Sustained break of 114.88 will pave the way for retesting 109.20 low. On the upside, above 116.54 minor resistance will turn intraday bias neutral and bring recovery. But upside should be limited by 118.23 support turned resistance and bring fall resumption.
In the bigger picture, medium term corrective rise from 109.20 should have completed at 124.08, ahead of 126.09 support turned resistance. Medium term down trend from 149.76 is likely resuming. Break of 109.20 will target 94.11 low. In any case, break of 126.09 is needed needed to confirm medium term reversal. Otherwise, outlook will remain bearish in case of rebound.
In the long term picture, medium term decline from 149.76 is seen as part of a long term sideway pattern from 88.96. Such decline is still in progress and could target 94.11 low. At this point, we'd look for loss of downside momentum above 94.11 to signal bottoming and reversal. This bearish view will hold as long as 126.09 resistance holds.