Asian indices and Nikkei ended higher today as the Brittish Parliament failed on Saturday to deliver a vote on Brexit deal. EU has not yet responded to PM Johnson’s request for an extension of the October 31st deadline. The Hang Seng index finished 0.03% higher at 26,722, the Shanghai Composite ended 0.05% higher at 2,939, while the Singapore Straits Times is 0.92% higher at 3,142. Aussie stocks finished flat; the ASX 200 ended almost unchanged at 6,652.
Nikkei 225 finished 0.25% higher at 22,548 as the index consolidates around yearly highs getting a boost from positive earnings from USA. The Japan All Industry Activity Index (month over month) came in at 0% topping expectations of -0.1% in August. Last week Data from China disappointed investors as Gross Domestic Product (YoY) below came in at 6% below expectations of 6.1% in 3Q, for the quarter China Gross Domestic Product came in at 1.5% in line with forecasts. Nikkei boosted by Daiwa House Industry Co. Ltd. +2.48%, Kobe Steel Ltd. +2.32%, Recruit Holdings Co. Ltd. +2.11, and JFE Holdings Inc. +2.10%.
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In the short-term, the trend will remain bullish as long we trade above the August 2 low of 1429.77. The price is about 60 dollars from the low, and about 54 dollars from the next major targets, hence the risk-reward ratio for a fresh long position is poor. However, if the price corrects 50% of the rally from the August 2, and thereby reaches 1461 level, the risk-reward ratio will improve to 2.54 times the risk.Download our latest quarterly market outlook for our longer-term trade ideas.
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