nikkei 225 daily outlook fri 02 oct remains toppish in the short term below 17955 resistance 1461222

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What happened yesterday

The Japan 225 (proxy for the Nikkei 225) has staged a direct drop and met expected downside target at 17460 in the U.S. session.

Please click on this link for a recap on our previous daily outlook.

Key elements

• The Index remains capped by the upper limit (resistance) of the “Descending Wedge” range configuration in place since 28 August 2015 high at 17955.
• The hourly (short-term) RSI oscillator remains toppish but it is still supported by a trendline support which corresponds with a similar trendline support on the Index that is linking the lows since 29 September 2015 @1pm at 17530.
• The next short-term support stands at 17200 which also corresponds closely with the 61.8% Fibonacci retracement of the recent up move from  29 September 2015 low @1pm to the 01 October 2015 high @11am.

Key levels (1 to 3 days)

Pivot (key resistance): 17955

Support: 17530 & 17200

Next resistance: 18660

Conclusion

The Index remains toppish below the 17955 daily pivotal resistance (upper limit of the “Descending Wedge”) and a break below 17530 is likely to trigger a further decline to target the next support at 17200 in the first step.

On the other hand, a clearance above the 17955 pivotal resistance is likely to invalidate the bearish scenario for a further push up to target the next resistance at 18660.

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