Global macro overview for 21/09/2016:
The Bank of Japan has surprised the global investors and has left the interest rate unchanged at the level of -0.10%. Market participants had expected another rate cut deeper into a negative territory to -0.20%, but the BoJ left itself the option of cutting rates further in the future. Moreover, the annual monetary base hasn't been changed as well and BoJ left it at the level of 80 trillion yen, but it changed some internal operations within its policy that include: buying Japanse Government Bonds so 10YR curve hovers around zero, adopts commitment to let inflation shoot over 2% and scraps range for duration of JGBS that BoJ buys. Moreover, BoJ can cut short-term policy rate and accelerate the expansion of monetary policy base as future policy option. In conclusion, the Bank of Japan has done what every other major central bank this month has done so far. That is hold and wait to see what Federal Reserve decides this evening and hope they are due to raise the interest rate.
Let's now take a look at the USD/JPY technical picture after the news release. As we can see after the initial spike up the market returned to the pre-interest rate news release level and now the daily candle does not look very bullish at all. The higher time frame trend is still bearish, so the technical support at the level of 99.55 - 99.01 is the key zone here for all traders.
