EURJPY Sitting on Key Level Price action in EURJPY is looking interesting here. The pair is currently sitting near the middle of the 133.27 – 147.75 range which has framed price action since Q2 last year. Over the last few months, EURJPY has been correcting lower, despite broad strength in EUR. Of late, JPY has turned sharply higher driven by speculation that the BOJ might be close to beginning policy normalisation after sticking to its easing strategy throughout the post-pandemic period to date, despite other central banks in the G10 firmly embarking on tightening operations. This speculation is driving a shift in expectations and has the potential to cause a major shift in markets if the BOJ gives any sign this week that tighter monetary policy is on the horizon.The monetary policy divergence between the BOJ and other central banks was a key driver of downside action in JPY last year. However, with central banks such as the Fed, BOC and RBA having pivoted on rates, that monetary policy divergence is narrowing. Should the BOJ give any hawkish signals this week, we can expect that divergence to narrow at a faster pace, driving JPY higher near-term. With the retail market building a larger long position in EURJPY currently 62%, there is plenty of room for a downside break in the near-term.Technical ViewsEURJPYThe correction lower from last year’s highs has seen the market moving broadly within a corrective bear channel, taking price below the bullish trend line from last year’s lows. With price having recently failed at a retest of the bull trend line, the outlook remains in favour of further downside near-term, in line with weakening momentum studies. The key level to watch is the 137.74 level with a break of this area opening the way for a run down to 133.27 next.