2) EURJPY

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

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

• Resistance: 133.00, 133.50, 134.10
• Support: 131.80, 131.30, 130.70

The currency pair has been volatile this week and very mixed. Intraday trading was very broad all week. However, for almost the entire week, the currency pair globally hung sideways. The alternating demand for protection and risk led the currency pair to such a move. There were fewer fears this week, and the main ones, as usual, were from the Middle Kingdom. At first, China introduced a full lockdown in several large industrial cities, later it set a record for the number of cases since the beginning of September. Also, fear was caused by the potential default of the Chinese giant Evergrande, which was supposed to pay interest on dollar bonds no later than Friday. Earlier, the Chinese authorities demanded from the founder of Evergrande Hui Ka Yan to direct his own funds to pay off the company's debts. As it later became known, the payment was made, which significantly calmed the markets. The currency pair traded in a range of 140 pips over the week, closing at -25 pips. At the end of the week, the market has established itself in the Risk-ON state. The value of the Fear-Greed indicator points to 72.

Although all the news feeds in Japan were jammed with election campaigns this week, the Bank of Japan held a monetary policy meeting on Thursday. On which BoJ saved all parameters unchanged. Unlike other major economies, high inflation is not a problem in Japan. Moreover, the Bank of Japan has cut its growth and inflation forecasts and now expects inflation at 0.0% in fiscal 2021. It also means that the Bank of Japan will not rush to tighten policy anytime soon.

The ECB also held a meeting on Thursday, the European Central Bank left its monetary policy unchanged, as expected. The announcement was largely a copy of the previous meeting, in which politicians pledged to continue financial support for as long as needed and reiterated that inflation would soon fall from its current 13-year high. It was also announced that the emergency PEPP program will end as planned in March 2022. During the press conference, ECB President K. Lagarde said that the ECB does not pay attention to the market's expectations in terms of an interest rate hike, and the ECB does not plan to increase it in 2022. She also reported on the temporary nature of inflation, but it will take more time to reduce it than the wound had expected.

Speaking of inflation, the EU CPI released on Friday reached a 13-year high of 4.1% y / y in October, while the German CPI jumped to 4.6% y / y in the same month.

No important news is expected in Japan next week. However, Japanese markets may be volatile on Monday morning following Sunday's elections. Only the defeat of the ruling LDP, which is unlikely, can have a significant impact. Plus, don't forget that Japan is resting on Wednesday.
In the EU, we expect one important publication on Wednesday, when the unemployment rate for September will be published.

In terms of the prospects for the movement, we believe that the disappointment with the dovish position of K. Lagarde will soon pass and the market phase and the general fundamental background will again remain on the agenda. On which the currency pair can be marked exclusively upward movement. Plus, don't forget about BoJ's stance on exchange rate control, the Bank of Japan has been recognized as a currency manipulator.

All downward movement is perceived as nothing more than a correction. However, in case of a breakdown of the 130.50 support level, the bulls may lose initiative.

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