nikkei 225 paring back gains before boj but still above supports 1823352016
Daily Outlook, Thurs 28 July 2016 (Click to enlarge charts) What happened earlier/yesterday The Japan 225 Index (proxy for the Nikkei 225 futures) has started […]
Daily Outlook, Thurs 28 July 2016 (Click to enlarge charts) What happened earlier/yesterday The Japan 225 Index (proxy for the Nikkei 225 futures) has started […]
The Japan 225 Index (proxy for the Nikkei 225 futures) has started to give back almost the gains it has recorded in yesterday’s rally (reinforced by PM Abe’s fiscal spending package that worth more than 28 trillion yen). In today’s morning Asian session (28 July), the Index has continued its slide from the overnight U.S. session and shed 2.3% from yesterday’s high of 16847.
The upside movement from the 26 July 2016 low of 16253 (above 16200 medium-term pivotal support) has failed to have a “clean break” above the 16730 intermediate resistance but it is still holding above the short-term pivotal support of 16440 as per defined in our yesterday’s short-term outlook.
Please click on this link for a recap on our previous daily short-term technical outlook/strategy.
Current price movement of the Index is now implying a lower expectation on the quantum of any new monetary policies from BOJ’s meeting tomorrow which actually increases the probability on the element of “surprise” that BOJ Governor Kuroda (his forte) may use to create a “positive shock” on risk assets.
Pivot (key support): 16440
Resistances: 16780 & 17100/240
Next support: 16200 (medium-term pivot).
Maintain bullish bias as short-term pivotal support at 16440 is not yet broken. Right now, the Index needs to see a break above the 16780 intermediate resistance to open up scope for a potential rally to target the 17100/240 resistance zone in the first step.
However, a break below the 16440 short-term pivotal support may invalidate the preferred direct rise scenario to see another round of pull-back to test the 16200 medium-term pivotal support.
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