nikkei 225 short term technical outlook potential pull back below 18000 1838092016
<p>Thurs, 17 Nov 2016 (Click to enlarge chart) What happened earlier/yesterday The Japan 225 Index (proxy for the Nikkei 225 futures) has shaped the expected […]</p>
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Thurs, 17 Nov 2016
What happened earlier/yesterday
The Japan 225 Index (proxy for the Nikkei 225 futures) has shaped the expected up move since the start of this week and almost hit our first medium-term upside target/resistance at 18000 (printed a high of 17943 on Wed, 17 November 2017. Please click here for a recap our latest weekly technical outlook on the major stock indices published on Monday, 14 November 2016.
Key elements
- Price action of the Index has staged a bearish breakdown from a minor “Ascending Wedge” configuration with its pull-back resistance now at 17910.
- Based on intermarket analysis, the USD/JPY is now likely to see a short-term pull-back below short-term resistance at 109.75 towards 107.80/107.00 after a steep rally from the 09 November 2016 low of 101.20. This observation seen in the USD/JPY is likely to translate to a potential short-term weakness in the Nikkei 225.
- The significant short-term support for Index rests at 17600/490 zone which is defined by the pull-back support of the former long-term descending trendline resistance from 21 June 2015 high and the 23.6% Fibonacci retracement of the recent sharp rally from 09 November 2016 low of 16097.
Key levels (1 to 3 days)
Intermediate resistance: 17910
Pivot (key resistance): 18000
Support: 17600/490
Next resistance: 18630
Conclusion
The Index now faces the risk of a short-term pull-back (1 to 3 days) towards the 17600/490 support below the 18000 short-term pivotal resistance.
However, a clearance above 18000 is likely to invalidate the preferred short-term bearish view to see the continuation of the medium-term upside movement towards the next resistance at 18630.
Charts are from City Index Advantage TraderPro
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