BOJ surprises markets by applying negative interest rate

USDJPY could spike to 121.40 following BOJ's decision to lower the interest rate to -0.1%, after it has kept it unchanged at 0.1% since Dec. 19, 2008.
BOJ said that the negative interest rate will work with the unchanged monetary base expansion pace by 80 trillion yen annually for achieving the price stability target of 2 percent at the earliest possible time. enhance.
BOJ said that it will introduce a multiple-tier system which some central banks in Europe have put in place adopting a three-tier system divided into a positive interest rate, a zero interest rate and a negative interest rate, respectively.
Nikkei 225 rose directly about 300 points following the decision which came to add to the risk appetite, after the US major equities indexes ability to capitalize on the oil rebound to get back some of what they lost last Wednesday following FOMC's dovish assessment which underscored the Fed's worries about the implications global economic slowdown and the financial development.
While the cable could overcome 1.4365 resisting level to creep up to 1.4405, after the release of UK Q4 GDP flash reading which came as expected showing growth by 1.9% y/y following growth by 2.1% in the third quarter.
The eyes are to be directed today to the preliminary release of USQ4 GDP which is expected to show deceleration to 0.8% annualized growth, after growth by 2% in the third quarter.

Instrument in Focus: USDJPY

BOJ could surprise the markets by today decision to apply negative interest rate driving USDJPY to extend its rebound from 115.96 to 121.40 which is the highest reached level since last Dec. 12, before retreating again to 119.30 area in a normal volatile reaction to the decision.
The decision came after the release of Japan National CPI ex fresh foods which is the favorite gauge of inflation to BOJ. This figure came as expected and as the same as November rising by only 0.1% in December but Jan Tokyo CPI ex fresh foods which can be a clue to the next figure of Japan declined yearly by 0.1%, after rising by 0.6% in December.
USDJPY daily Parabolic SAR (step 0.02, maximum 0.2) is reading now 116.36 in its sixth day of being below the trading rate, after rebound extension to 118.86 last Friday.
USDJPY daily RSI is referring now to existence in the neutral region reading now 60.123, while its daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line in the neutral region but close to the overbought area above 80 reading 77.361, while its signal line is actually now in the overbought area reading now 81.524.

Important levels: Daily SMA50 @ 120.34, Daily SMA100 @ 120.59 and Daily SMA200 @ 121.46
S&R:
S1: 117.64
S2: 116.45
S3: 115.96
R1: 121.40
R2: 123.74
R3: 124.61

USDJPY M5 Chart:

USDJPY Daily Chart:

Commodities: Gold

With the risk appetite improving, The gold pared more gains to be traded now near $1115 per ounce, after reaching $1127.80 following the Fed's outcome which has been the highest reached level since last Nov. 3.
The gold could gather momentum, before the FOMC meeting, after getting over its daily SMA100 following surpassing $1112.75 which capped it on last Nov. 4.
$1071.22 could help the gold previously to bounce up again above its daily SMA50 forming a floor at $1057.98 which drove the gold to start being above its daily Parabolic SAR (step 0.02, maximum 0.2) for 20 consecutive days reading today $1099.42.
XAUUSD daily RSI-14 is referring now to existence in its neutral area reading 60.237, while its daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line in the neutral region reading 70.549, while its signal line is still in the overbought area above 80 reading 81.315.

Important levels: Daily SMA50 @ $1080.41, Daily SMA100 @ $1105.73 and Daily SMA200 @ $1131.49
S&R:
S1: $1071.22
S2: $1057.98
S3: $1046.08
R1: $1127.80
R2: $1138.05
R3: $1149.84

XAUUSD Daily chart:

Hot instrument: SP-MAR16

SP-MAR16 could be boosted during the Asian session by BOJ's decision to rise to 1902.75, while the risk appetite has been already boosted yesterday by retreating of US Initial Jobless Claims in the week ending on Jan. 22 to 278k and the consensus was referring to retreating to 282k from 293k in the week ending on Jan. 15, despite the shocking release of Dec durable goods orders which decreased by 5.1% monthly, while the consensus was referring to -0.6% only, after declining by 0.5% in November.
SP-Mar16 daily RSI is reading now 41.028 in its neutral region coming from its oversold area below 30 and also its daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line into the neutral region reading 57.480 and also its signal line which is reading now 64.886.
SP-MAR16 daily Parabolic SAR (step 0.02, maximum 0.2) is referring today to 1825.03 in its sixth day of being below the trading rate, after rising extension last Friday too reached 1902.

Important levels: Daily SMA50 @ 1997.55, Daily SMA100 @ 2002.00 and Daily SMA200 @ 2037.23
S&R:
S1: 1851.25
S2: 1836.25
S3: 1804.25
R1: 1909.75
R2: 1927.25
R3: 1946.25

SP-MAR16 Daily chart: