Overall, EUR/JPY is ranging across. Recently, EUR/JPY trended lower into the support zone of 122.600 after the market adopted a risk-off sentiment due to worsening COVID-19 condition and U.S. Presidential Election uncertainty. Yesterday, German Chancellor Angela Merkel announced an emergency partial month-long lockdown starting from 2 November. Also, French President Emmanuel Macron has announced a second national lockdown starting this Friday that will last until at least the end of November. It was reported yesterday that the UK and the EU have made progress in trade deal negotiations with a possibility of reaching a deal by early November. The German Preliminary CPI m/m data (Forecast: 0.0%, Previous: -0.2%) will be released today at a tentative timing. The European Central Bank (ECB) will be announcing their interest rate decision later at 2045 (SGT). It is expected that the central bank will be holding interest rate unchanged at 0.00%. However, with the recent reimposed lockdown measures across Europe, the ECB may highlight the severity and hint on further easing in terms of increasing its Pandemic Emergency Purchase Programme. The central bank will also be holding a press conference following the announcement at 2130 (SGT). During this time, volatility is expected of EUR. The Bank of Japan (BoJ) will be announcing their monetary policy decision tomorrow at a tentative timing. It is likely that the central bank will keep their monetary policy unchanged.
Also, a press conference will be held after the monetary policy decision. During this time, volatility is expected. Currently, EUR/JPY is testing the support zone of 122.600 and the next resistance zone is at 124.750.
Look for short-term selling opportunities of EUR/JPY if it breaks the support zone of 122.600.