2) EURJPY

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

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

• Resistance: 133.00, 133.50, 134.10
• Support: 132.00, 131.80, 131.30

The currency pair continued to dangle yesterday without the main direction in a narrow sideways trend. Nothing new is happening, Japan is still focused on elections, the market phase has not changed. The market is still in the Risk-ON phase, the demand for risky assets is high. The value of the Fear-Greed indicator 70. We will monitor the changes in the market phase at the end of the day. The dominant risk sentiment undermined the safe Japanese Yen and was seen as a key factor in the currency pair's movement.

Neither the EU nor Japan published anything yesterday. Now large market participants seem to be waiting on the sidelines ahead of the ECB meeting, which is scheduled for Thursday. Many analysts point out that rising inflationary expectations will be a key topic at this ECB meeting. Persistent fears about inflation lead to greater confidence in the sooner tightening of ECB policy.

After several months of high actual inflation and amid rising energy prices and supply problems, inflation expectations in the euro area reached their highest level in seven years and stood at 2.0509% yesterday.
However, the ECB leadership continues to downplay concerns about inflation, and the focus this week will remain on the regulator's plans to roll back anti-crisis measures to support the economy under the PEPP program, launched amid the pandemic.

In terms of fear, the subject of COVID is returning again, and again to China. China has introduced a lockdown in a large industrial metropolis, the city of Lanzhou. The market has not yet won back this news, but most likely we will see the reaction. It is very possible that we will see a couple of downward shots ahead against the backdrop of impulses in demand for protection.
The real estate market is gradually bouncing back and the People's Bank of China continues to inject increased liquidity into the banking system. Chinese regulators have offered billionaire Hui Ka Yang to use his personal fortune to ease the deepening debt crisis at real estate giant Evergrande. Local governments across China are monitoring Evergrande's bank accounts to ensure that company funds are used to complete unfinished housing projects, rather than going to pay off creditors.

Today, nothing is foreseen in the macroeconomic calendar of the EU and Japan.
The Bank of Japan will announce its interest rate decision tomorrow. However, there is little chance of any change before the November FOMC meeting and before the October 31 lower house elections. Campaigns will again dominate the headlines in Japan this week.

Also tomorrow there will be a meeting of the European Central Bank. No changes in policy, economic forecasts or recommendations are expected, but ECB President Christine Lagarde's press conference is always worth watching for answers to important questions regarding the ECB's plans for an emergency PEPP program and more.
On Friday, the EU is to publish the level of consumer inflation for October, inflation is expected to rise to 3.7% year on year.

In terms of the prospects of movement, everything is unchanged.
Due to the market phase and fundamental background, the upward movement is more promising. The fundamental assessment speaks of an exclusively upward movement, which is supported by macroeconomic data from the EU and Japan, and the EU's success in recovering from COVID is years ahead of Japan. Plus the position of BoJ, which was recognized as a currency manipulator.
The downward movement is exclusively in the form of a downward correction. The reasons for the downward movement may be the increased demand for protection, the hawkish position of the BoJ tomorrow, or the dovish position of the ECB. However, in case of a breakdown of the 130.50 support level, the bulls may lose initiative.

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