Nikkei 225 ended lower on Monday as the rising tensions between China and the USA weigh on investors sentiment. China ordered the closure of U.S. consulate in Chengdu after the U.S. administration closed the Chinese consulate in Houston the previous week. The coronavirus new cases continue to rise in many areas around the globe threatening the global economic recovery, while Victoria state in Australia considering the extension of the six-week lockdown.
Investors shift their attention to safe-haven assets and gold, hits today record highs at $1944 per ounce.
On the data front, the Japan All Industry Activity Index rose to -3.5% in May from previous -6.4%. The Leading Economic Index came in at 78.4, below the forecasts of 79.3 in May, while the Coincident Index came in at 73.4, below the estimates of 74.6.
Nikkei 225 Technical Analysis
Nikkei 225 ended 0.16% lower at 22,715 at the lowest level since July 10th, after the Nikkei index failed to break above the 23,000 mark. Nikkei is 38% higher since the March lows amid the coronavirus lockdown. The technical outlook remains bullish as the index stays above the major daily moving averages.
On the downside, initial support for Nikkei 225 stands at 22,429 the session low. If the Nikkei 225 index moves below, then the next support will be met at 22,161 the 50-day moving average. If sellers managed to break that level, the next support area stands at 21,945 the 100-day moving average.
On the other hand, the first resistance for the Nikkei 225 stands at 22,741 the daily top. The next obstacle for the Nikkei 225 index stands at 22,861 the high from Friday’s trading session. If the index continues higher than 22,861, the next supply area is at 23,190 the top from June 10th.
Nikkei 225 Daily Chart