ASX 200 and Nikkei 225 Technical Outlook: Reversals and Key Levels in Focus

The ASX 200 and Nikkei 225 are showing contrasting signals as we head into September. While the ASX 200 experienced its sharpest decline in four months—threatening to confirm a broader top—the Nikkei 225 continues to consolidate within its uptrend, holding key support levels and showing signs of renewed upside momentum. Here’s a breakdown of where both indices stand technically, and what traders should watch in the days ahead.

View related analysis:

ASX 200 Faces Reversal Risk, While Nikkei 225 Eyes a Fresh Breakout

ASX 200 Futures (SPI 200) Technical Analysis

The ASX 200 experienced its worst single-day drop in four months on Wednesday, driven by risk-off sentiment as global bond yields surged. The information technology sector led the decline with a -3.8% loss, followed by financials at -2.8%. All 11 sectors closed in the red, and SPI futures traded in the lower quadrant of Wednesday’s range overnight.

While my original expectation was for a standard ABC correction, Wednesday’s sharp move lower suggests the decline may be impulsive—which implies further downside before a potential cycle low is found.

At current levels, the ASX 200 is on track to complete a 3-week bearish reversal pattern known as an evening star. If this top proves significant, the record high near 9,000 may not be retested for some time.

Should the index extend its losses, the 8600 area becomes the next major support zone, aligning with the 20-week EMA, the February high, and the August low.

On the daily chart, the RSI (2) reached a 2-month low within its oversold zone, so a minor bounce is possible. However, I suspect ASX bears may look to fade into any strength toward 8800 or the monthly pivot at 8833—although that upside could prove limited given the acceleration of bearish momentum.

Chart analysis by Matt Simpson - data source: TradingView, ASX SPI 200 Index Futures (AP1!)

Nikkei 225 Futures (NK) Technical Analysis

Nikkei 225 bulls have enjoyed a 43% rally from the April low to the record high set in August—driven largely by the easing of Trump-era tariffs and the ongoing Wall Street rally. While further upside may depend on whether US indices continue to push higher, with prices still holding above the 2024 trendline, at least a minor upswing in the Nikkei appears likely.

The daily chart shows a well-structured bullish trend, with prices consolidating just below the 20-day EMA—a setup we’ve seen ahead of previous swing moves during this rally. The 50-day EMA remains upward sloping and is yet to be retested.

A small doji candle formed on Wednesday near the monthly pivot, accompanied by a bullish divergence on the RSI (2) and the RSI (14) holding above 50—suggesting buying momentum may be building.

The near-term bias remains bullish, with a potential move toward 43,000 in focus. A break above the 43,200 swing high would bring the all-time high at 43,930 back into play.

Should a deeper pullback develop, key support levels include the 50-day EMA (41,193), the high-volume node (40,700), and the 40,000 handle—all of which may attract dip buyers looking for signs of a swing low.

Chart analysis by Matt Simpson - data source: TradingView, Nikkei 225 (NK221!)

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-- Written by Matt Simpson

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