EUR/JPY Flat Ahead of ECB Meeting: Rate Cut Expectations Set the Stage for Potential Moves

The EUR/JPY  trades flat ahead of the ECB monetary policy. It hit a low of 162.06 at the time of writing and is currently trading around 162.57.

Intraday bias remains neutral as long as resistance  163.89 holds. The pair remained within a narrow range of 163.61 and 162 for the past week.

ECB preview -

The European Central Bank (ECB) is expected to cut interest rates for the third time this year during its upcoming meeting on Thursday. This decision is influenced by a quicker-than-expected drop in inflation, which fell to 1.8% in September, below the ECB's target of 2%. Markets predict a 25 basis point cut this October, reducing the key deposit rate from 3.5% to 3.25%. Another cut to 3% is anticipated in December. The ECB has already lowered rates twice this year due to a weak economic outlook and declining inflation.

Technicals-

 The pair is trading below  34- and above 55 EMA and 365 hull moving average in the 4-hour chart.

 The near-term resistance is around 162.75, a breach above targets 163/163.60/163.89/164.64/165/167.37 (61.8% fib retracement level from 175.41 and 154.40) The immediate support is at 161.90, any violation below will drag the pair to 161.20/160.65/160/159/158.35.

 Indicator (4-hour chart)

 CCI (50)- Bearish

 Average directional movement Index - Bearish. All indicators confirm a mixed trend.

It is good to buy on dips around 162-162.05 with SL around 161.40 for a TP of 163.60.