Talking Points:
- Nikkei 225 Strategy: Wait out the consolidation
- 10-day MA at 17,620 provides weak resistance level, topped by 17,653 then 20-day MA
- More choppy trading is expected until weekend
JPN 225 is on a fifth day of sideways trade, despite a resilient upward momentum. 10-day moving average at 17,620 caps the upside for now, with October 14-15 low at 17,653 nearby. Investors should wait for this consolidation to pass, when the current upside bias may come into play again.
A firm support at 16,890 on the downside and 10-day moving average on the upside combine to form an immediate range - which likely contains prices until next week. By then upward momentum may bring back higher moves, or alternatively choppy trading could ensue.
Those with long positions could keep stop trailing firm support level in anticipation of the first scenario next week. Dip buying is however limited, given risk-aversion before the weekend.
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
