The Nikkei 225 is following in the footsteps of its American counterparts in last night’s trading. Japan’s stock index is in the red by around 1% or 190.0 points as it trades around a critical support level at 19,103.0.
Aside from the sustained slide in crude oil prices, the Nikkei 225 may have also been weighed down by dovish expectations from the Bank of Japan (BOJ). There was news earlier today which said that the central bank would downgrade their assessments of the economy in their upcoming meeting next week.
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Nikkei 225 Outlook
On the 4-hour time frame of Nikkei 225 CFDs, it can be seen that the stock index is trading at trendline support (from connecting the lows of March 18, April 3, and April 6). This price, around 19,040.0, also coincides with the 100 SMA and 200 SMA. A few reversal candlesticks have already materialized which could hint that Nikkei 225 may soon rally to its near-term resistance at 19,900.
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On the other hand, the daily time frame paints a more bearish picture. The Nikkei 225 has been consolidating with an upward slope since March. Because this follows after the stock index drastically fell, a bearish pennant chart pattern has formed. A close below today’s lows at 18,845.0 would effectively break support at the bottom of the pennant. It could then mean that Nikkei 225 is headed to its March lows at 16,240.0.More content
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