EUR/JPY surged to as high as 129.31 last week and the development indicates completion of fall from 131.97 at 124.89, ahead of 124.61 low. Initial bias remains on the upside this week for resistance zone between 131.97 and 61.8% retracement of 137.49 to 124.61 at 132.56. On the downside, break of 127.88 minor support is needed to indicate short term topping. Otherwise, further rally will remain in favor even in case of retreat.
In the bigger picture, EUR/JPY once again rebounded ahead of 124.08 key resistance turned support. It’s also held above long term trend line from 109.03 (2016 low). The development argues that such rise from 109.03 might now be over yet. Decisive break of 61.8% retracement of 137.49 to 124.61 at 132.56 will pave the way to retest 137.49 high. But, firm break of 124.08 will argue that whole rise from 109.03 (2016 low) has completed at 137.49. Deeper decline would be seen to 61.8% retracement of 109.03 to 137.49 at 119.90 next.
In the long term picture, at this point, EUR/JPY is staying in long term sideway pattern, established since 2000. Rise from 109.03 is seen as a leg inside the pattern. As long as 124.08 support holds, further rally is in favor in medium to long term through 149.76 high. However, break of 124.08 could extend the fall through 109.03 low instead.