The EUR/JPY has been consolidating in a sideways range. After briefly breaking below the range support, it rebounded sharply. This basically resulted in a suspect bearish breakout that might be a false breakout. A false breakout to the downside would suggest an eventual break to the upside. But as price retreats, we have to also juggle with an ABC correction scenario.EUR/JPY 4H Chart 1/23(click to enlarge)The Bullish Continuation Scenario:- A false bearish breakout followed by a bullish continuation is a possible scenario especially if price can hold above the 121.65 pivot.- The RSI should also hold above 40 now that it tagged 70. - The next near-term target would be 123, above which the 124-124.10 high would likely be tested. - Since the prevailing trend entering the December-January consolidation was bullish, we can anticipate further upside. - 125 is viable, but we should probably cap at 126 because it is a key support/resistance pivot level. (See Daily Chart Below)ABC Scenario:- Looking at the 4H chart, we can see that bulls haven't made it clear that they are in control of the market.- In fact there could be further bearish correction in the form of an ABC pattern for example. - In this scenario, we would still be bullish on EUR/JPY in the medium-term and over the next couple of month's horizon.- But in the short-term, we would anticipate further consolidation, with downside towards the 119.50 area.- Because of the prevailing uptrend, we might not want to project the bearish correction past the 118.55 pivot. Limbo:- I think if price can hold above 122 this week, the bulls have a good chance of pushing EUR/JPY higher.- However, between the 121 and 121.70 area, either the bullish continuation scenario or the ABC correction scenario looks viable. - A break below 121 would likely be part of further correction, even if its not a perfect ABC structure. EUR/JPY Daily Chart 1/23(click to enlarge)