Nikkei 225 finished to the highest level in two weeks following one more strong session in Wall Street as S&P 500 index approaches all-time highs. President Trump helped sentiment after signing the extension of the unemployment benefits and a set of tax reliefs for companies. The upcoming meeting between high-level officials from China and the USA to discuss the progress of first phase of the trade deal signed six months ago also supports investors sentiment despite the recent tensions between the two superpowers.
Japan’s current account surplus in June narrowed to the lowest level in five years in June at JPY 167.5 billion. Japan Exports fell 25.7% in June, having declined by 28.9% in May. The imports dropped 14.4% in June, after a 27.7% drop in May. The sharp deterioration in exports is due to the coronavirus outbreak crisis that sends global demand to record lows.
The Japan Eco Watchers Survey Current came in at 41.1 below the expectations of 46.6 in July while the Outlook came in at 36 also below the forecasts of 48.2.
Nikkei 225 Technical Analysis
Nikkei 225 ended the session with hefty gains adding 1.88% at 22,750 and managed to return above the 50-day SMA after six trading sessions. Now the bulls have cleared the last critical resistance and a new leg higher might be on the cards.
Initial resistance for the index is at 22,760 the daily top. More selling pressure would await at 22,863 the high from July 28. Looking higher at the daily chart, the next supply zone is at 22,926 the high from July 21.
On the downside, first support for the Nikkei 225 index stands at 22,489 – 22,497 zone – the daily low and the 50-day moving average. A break below would test 22,184 the low from yesterday’s trading session. The 200-day moving average at 21,984 would offer more support for Nikkei.
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Nikkei 225 Daily Chart
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