2) EURJPY

Technical Analysis (MA, RSI, STOCH, MACD, ADX)

• M30 - DOWN
• H1 - UP
• H4 - UP
• D1 - UP
• W1 - UP
• MN - RANGE

• Resistance: 130.50, 130.65, 131.30
• Support: 128.50, 128.30, 128.00

The currency pair was very active this week, there are many reasons here and the periodic demand for risky assets, the absence of Chinese traders, and of course the new Prime Minister in Japan. The currency pair traded in a range of 160 pips over the week, while closing +125 pips. At the end of the week, the market is still in a state of fear, the value of the Fear-Greed indicator points to 34.

Fear this week has become slightly less, we recall, the Russian leadership announced that it is ready to help the EU in overcoming the energy crisis. In the US Senate, Chuck Schumer announced an agreement to extend the national debt ceiling until early December.
However, the risks associated with the Chinese giants Evergrande and Fantasia, although they faded into the background, still persist, as well as the energy crisis in China.

This week neither Japan nor the EU published anything important, only second and third order data.

Since the beginning of the week, the new Prime Minister of Japan, Fumio Kishida, has been the main X factor in the Japanese stock market. The reason was that many investors believed that Kishida, who said he would eliminate inequalities in wealth, would use tax tightening. But later it became known that Fumio Kishida is also concerned about the unrest in the stock market, which he indirectly caused. He later announced that he would not try to change taxes on capital gains and dividends for now, as he intends to take other steps to better distribute wealth, such as raising the wages of medical workers, etc.
Prime Minister Fumio Kishida has set an election for October 31 and has pledged generous cash payments to citizens affected by COVID. All of this returned positive sentiment to the Japanese stock market and put additional pressure on the JPY.

On the other hand, a number of ECB officials have given interviews with a notable pigeon stance:
ECB President K. Lagrade commented on the developing energy crisis, saying that the ECB should not react too strongly to the shortage of supply or the rise in energy prices, since the monetary policy of the ECB cannot directly influence these phenomena.
Vice President of the ECB Luis de Guindos, who said that inflation in the EU will continue to grow, in addition, he added that the ECB, even after the end of the PEPP, will pursue a soft policy.
Also F. Lane and I. Schnabel, who reported that the current surge in inflation and the rise in energy prices are temporary and an excessive response from the ECB will be harmful to economic recovery.

Next week, neither Japan nor the EU are expecting important macroeconomic data, the only thing we can follow is the publication of the ZEW economic sentiment index for the EU for October.

The short-term forecasts for the currency pair have not changed and are reduced to control over the market phase; if there is an impulse to reject risks, the currency pair will fall down. There are enough risks in the market. However, with the situation normalizing, the fundamental assessment speaks of an exclusively upward movement, which is supported by macroeconomic data from the EU and Japan, as well as the success of the EU in recovering from COVID by years ahead of Japan. Plus the position of BoJ, which was recognized as a currency manipulator.

In other words, the downward movement is supported only by risk aversion. In any case, the support level of 128.00 is still a reversal level.

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