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Nikkei 225 Drops to One Week Lows

Nikkei 225
Nikkei 225

Asian markets and Nikkei ended lower today as traders await the developments in trade negotiations between China and US which are scheduled to start in early October. Wall Street losses weighed by weaker US macro data and news that the Democrats start an inquiry to impeach President Trump add pressure to stock indices. The Hang Seng trading 1.27 per cent lower at 25,946, the Singapore Straits Times index finished 0.96 per cent lower at 3,125, and the Shanghai composite ended 1,00 per cent lower at 2,955. Aussie stocks also finished lower; the ASX 200 ended 0.48% lower at 6,716.

Nikkei 225 finished 0.36% lower at 22,020 after Bank of Japan released the policy meeting minutes, from July that didn’t provide any fresh clues. The Japan BoJ Core CPI for August came in at  0.4% y/y below expectations of 0.6%.

The Nikkei retreated today as I was expecting after the RSI index hovering at overbought levels. Despite today’s correction the RSI (14) still trading at 71 leaving room for more downside. On the downside immediate support stands at 21,906, today’s low and then at 21,216 the 100-day moving average. A break below that level might accelerate the selloff down to 21,157 and the 200-day moving average.

On the upside resistance for the Nikkei 225 stands at 22,036 today’s high, a break above, perhaps will set the stage for a move up to 22,180 the high from May 7th, which will open the way for a move up to yearly highs.

In Asian forex markets USDJPY trading 0.21% higher at 107.28, the Aussie dollar trades 0,34% lower at 0.6777, while NZDUSD trades 0.04% higher at 0.6325 versus USD. Gold trades higher today at 1,531, while WTI crude oil is 1.17% lower at $56.62 per barrel.