Nikkei 225 Ends Higher after Fed Interest Rate Cut

Nikkei 225 recovered yesterday’s losses after Fed delivered the 25 basis points interest rate cut that markets widely expected. The Hang Seng index trades 0.76% higher at 26,871; the Shanghai Composite is 0.35% lower at 2,929. Aussie stocks finished lower; the ASX 200 ended 0.39% lower at 6,663.

Nikkei 225 finished 0.37% higher at 22,927 after Bank of Japan kept its monetary policy as expected and changed its forward guidance to more clearly signal the future chance of a rate cut. On the economic data front, the Japan Annualized Housing Starts came in at 0.897M for September versus 0.891M. Japan Consumer Confidence Index came in at 36.2, above forecasts (35.5) in October. Nikkei boosted by Nippon Express Co. Ltd. +4.55%, Sony Corp. +4.08%, SoftBank Group Corp. +3.71%, and Olympus Corp. +3.42%.

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Nikkei 225 Technical Analysis

The Nikkei index gained ground today as the positive momentum persists holding above all major daily moving averages. Longs should check the RSI index, which has reached 72.24 on the daily chart an overbought level that might trigger some profit-taking.

On the upside resistance for the Nikkei 225 benchmark stands at 22,988 today’s top, a break above will open the way for a move up to 23,000 weekly high and then at 23,528 the high from October 9th, 2018, above this level, the next resistance comes at 24,310 the high from on October 1st, 2018. On the downside, first support stands at 22,875.5, today’s low, a convincing break below might drive prices down to 22,450 the low from October 23.  The 50-day moving average will provide extra support at 21,636.

In Asian forex markets, USDJPY trading 0.26% lower at 108.55 the Aussie dollar trades 0.22% higher at 0.6918, while NZDUSD trades 0.54% higher at 0.6422 versus US Dollar. Gold trades higher around $1,500, while WTI crude oil is 0.54% higher at $55.36 per barrel.Download our latest quarterly market outlook for our longer-term trade ideas.

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