7) USDJPY

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

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

• Resistance: 112.00, 112.20, 113.00
• Support: 110.25, 109.20, 108.70

The currency pair was very active and multidirectional yesterday, trading was conducted around the round level of 111.00, at the end of the day a pin bar was formed. As usual, the main movement was associated with the demand for safe-haven currency and high volatility in the Asian stock markets. Let's remind now China is resting, which means a thin market in Asian stock markets. The energy crisis and potential default by Chinese giant Evergrande are still in the spotlight, but spillovers and broader impacts are starting to show. Another major Chinese real estate developer, Fantasia Holdings Group, yesterday missed the $ 205.65 million debt maturity deadline due on Monday. All this led to another round of extreme fear in the markets, the value of the Fear-Greed indicator is again at the level of 25.

The fall in Japanese stocks intensified after Japan's new prime minister, Fumio Kishida, said it was necessary to intensify discussions over an investment tax to tackle Japan's income inequality. But on the other hand, the US dollar also remains strong enough, it is helped by its role as a safe-haven currency, and of course investors' belief that the Fed will begin to cut the QE program in November, and the first interest rate hike will occur in 2022.

Since the macroeconomic calendar of Japan remains empty, we follow the developing situation in China, and the messages of the new Prime Minister of Japan.
Also, don't forget about the US and the market phase.
Today we are waiting for the publication of the US trade balance for August
Tomorrow is the first in a series of important reports: Change in the number of employees in the non-agricultural sector from ADP in September, everyone knows that the data from the ADP recently does not strongly correlate with the official data of the Ministry of Labor, but still this report is able to cause serious volatility!
On Thursday we are waiting for weekly data on the number of Initial Jobless Claims
Friday:
- Nonfarm Payrolls (Sep) - USD
- US Unemployment Rate (Sep) - USD

The general fundamental background for the currency pair has not changed yet, the upward direction is still basic.
We perceive the downward movement as more corrective and believe that the downward movement will be severely limited. Now the currency pair is close to the level of confirmation of the beginning of the downward correction, 111.00 = 38.2% Fibo from the last upward impulse. The area where the steam can fall is 110.60 - 110.25. Even in the event of a breakdown of the 61.8% Fibo level, the currency pair is unlikely to be able to overcome the support level 108.00 in the near future, which was insurmountable many times.

The important thing is that the Fed is very much ahead of the Bank of Japan in terms of normalizing monetary policy. Ultimately, this divergence between central banks could allow US yields to rise faster than their Japanese counterpart, allowing the dollar to rally against the Yen.

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