EUR/JPY's fall from 123.31 extended further to as low as 113.49 last week and remains weak. Initial bias remains on the downside this week for deeper decline. Sustained trading below 113.54 support will indicate that whole rebound from 106.57 has indeed completed at 123.31 already. In such case, further fall should be seen to retest 106.57 low next. On the upside, break of 117.57 resistance is needed to signal bottoming. Otherwise, near term outlook will remain bearish for deeper fall.
In the bigger picture, the current development argues that medium term rebound from 105.42 has possibly finished with three waves up to 123.31. In other words, it's merely a correction pattern inside the down trend from 2008 high of 169.96. Sustained trading below 113.54 support will pave the way for a retest on 105.42 low first. On the upside, however, break of 123.31 will revive that case that down trend from 169.96 has indeed completed at 105.42 already and will turn outlook bullish again.
In the long term picture, up trend from 88.96 (00 low) has completed at 169.96 and made a long term top there. Based on the five wave structure of the rise from 88.96 to 169.96, we're favoring that fall from 169.96 is corrective in nature. Current development raised the possibility that the 105.42 is not yet the bottom. In case of another fall, we'll continue to look for reversal signal ahead of 88.96 low.