Talking Points:
- JPN 225 Strategy: Keep wide stop/target amid choppy trading
- 10-day MA at 17,769 is resistance after any break of 5-day MA. Support is 16,890
- Possible moves in either direction, volatility heightened
JPN 225 descended near an 11-month low of 16,890 after it broke previous support at 17,098, no doubt triggering stop loss. The index returned to trading below 5-day moving average for most of Asian session. Mixed signals leave investors vulnerable to volatility in either direction.
The upturn in momentum signals has not abated, a hint that the index is under a mixed bag of pressure. September low and the lowest since January 2015 at 16,890 comes as support level. On the top side, 5-day moving average at 17,316 holds weak resistance, topped by 10-day MA at 17,769.
Traders should keep stops wide to weather the heightened volatility. There has not been a change in direction although choppy trading likely dominates in the short term.
Daily Chart - Created Using FXCM Marketscope
Losing Money Trading Forex? This Might Be Why.
--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh
