Asia Stocks Lack Upside Momentum, Nikkei 225 May Be Heading Higher
Asia Pacific Market Wrap – Nikkei 225, China Stimulus, Japanese Yen
- Asia Pacific stocks traded rather mixed, failing to capitalize on gains in S&P 500
- More Chinese economic stimulus bets may have helped tame pessimism in markets
- Nikkei 225 rose above a key resistance line, opening the door for more gains next
Find out what retail traders’ equities buy and sell decisions say about the coming price trend!
Asia Pacific benchmark stock indexes traded rather mixed, failing to fully capitalize following gains on Wall Street. There, the S&P 500 rose despite UK Prime Minister Theresa May losing the vote for her Brexit deal. The markets and the British Pound seemed to interpret the outcome as increasing the likelihood of a second Brexit referendum down the road and welcomed it.
The Nikkei 225, after having declined about one percent, trimmed losses and traded around -0.6% heading into the close. More prospects of Chinese economic stimulus seemed to have eased the pessimism in market mood somewhat. China’s Ministry of Commerce (MOFCOM) said that the nation will further boost consumption this year.
Australia’s ASX 200 traded higher by about 0.35% as expected while the Shanghai Composite was little changed. The anti-risk Japanese Yen was cautiously higher still after trimming gains. Meanwhile the pro-risk Australian and New Zealand Dollars were tepid as well. The former currency shrugged off Australian consumer confidence contracting by the most since September 2015.
Ahead, markets will still be focusing on the Brexit deal vote aftermath on the UK. Theresa May’s government is projected to survive a no-confidence vote initiated by the Labour opposition party. Given the focus on Brexit, the British Pound and FTSE 100 may focus more on those developments rather than domestic inflation data. Later in the day, US stocks and the US Dollar will be eyeing the Fed’s Beige Book.
Nikkei 225 Technical Analysis
The Nikkei 225 has managed to close above a near-term descending resistance line from December 2018, potentially opening the door to a lasting upside reversal. However, more confirmation is needed via closes higher. Prices are sitting right on top of support at 20,347. Near-term resistance is a horizontal range in-between 20,950 and 21,035. You may follow me on twitter @ddubrovskyFX for more immediate updates on the index.
Nikkei 225 Daily Chart
Chart created in TradingView
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--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.