2) EURJPY

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

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

• Resistance: 132.75, 133.65, 134.10
• Support: 130.50, 129.30, 128.50

The currency pair was very active this week, there are many reasons here and the periodic demand for risky assets, and of course the new Prime Minister in Japan. The currency pair traded in a range of 330 pips over the week, while closing +288 pips. At the end of the week, the market moved to a neutral state, the value of the Fear-Greed indicator points to 51.

This week neither Japan nor the EU published anything important, only second and third order data.
The main focus was on stagflation, on statements by ECB members, also on concerns about China's financial situation, on the aggravated energy crisis on news regarding Chinese construction developers. Which began to crumble like houses of cards. According to Bank of America, about 40% of China's construction companies, which have borrowed from foreign investors, are at risk of bankruptcy. The fact is that in recent years, Chinese developers have not focused on demand, but have been more engaged in speculation. It is clear that in the event of their default the whole world will feel the negative consequences, of course not as harshly as in 2008 with Lehman Brothers.

A quiet week lies ahead for the EU and Japan in terms of macroeconomic publications. The only exceptions are the Consumer Price Index (CPI) (YoY) (Sep) on Wednesday across the EU and the National Core Consumer Price Index (CPI) (YoY) (Sep) on Friday across Japan.

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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