EUR/JPY's correction from 131.39 short term top extended to 128.04 last week. The cross then tried to draw support from 38.2% retracement of 122.39 to 131.39 at 127.95 and recovered. Initial bias is neutral this week first. Above 129.54 minor resistance will argue that the pull back is completed and will turn bias back to the upside for retesting 131.39. However, sustained break of 127.95 will bring deeper decline to 125.80 cluster support (61.8% retracement at 125.82) before completing the correction.
In the bigger picture, the down trend from 149.76 (2014 high) is completed at 109.03 (2016 low). Current rally from 109.03 should be at the same degree as the fall from 149.76 to 109.03. Further rise is expected to 61.8% retracement of 149.76 to 109.03 at 134.20. Sustained break there will pave the way to key long term resistance zone at 141.04/149.76. Medium term outlook will remain bullish as long as 124.08 resistance turned support holds.
In the long term picture, at this point, there is no clear indication that rise from 109.03 is resuming that from 94.11. Hence, we'd be cautious on topping below 149.76 to extend range trading. Nonetheless, firm break of 149.76 will indicates strong underlying buying. In such case, EUR/JPY will target 100% projection of 94.11 to 149.76 from 109.03 at 164.68.