Ninja: BoJ and FED Shock Markets

7月31日

The Bank of Japan (BOJ) raised interest rates to 0.25%, dismantling a decade of monetary stimulus. This adjustment, accompanied by a plan to reduce monthly bond purchases to 3 trillion yen by 2026, is due to improvements in inflation and consumer spending, supporting the BOJ's forecast of 2% annual inflation.
Simultaneously, the US Federal Reserve (Fed) concludes its July meeting today. It is expected to keep its interest rate between 5.25% and 5.50%. A low inflation report in June has raised expectations of possible rate cuts in September. Market futures reflect a possible quarter point cut in September and 66 basis points by the end of the year. Investors are looking for signals on the timing and magnitude of these rate cuts.
Looking at the Ninja cross (USD/JPY) it has been developing a bullish channel since December last year. It is currently unemploying a corrective move to the lower zone of the channel which roughly coincides with the Check Point (POC) of 150,500 yen per dollar. The RSI is indicating an oversold level of 19.93% so it will not be unusual to see a reversal back to the middle of the channel in the coming days.

Ion Jauregui - ActivTrades Analyst




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