JPN 225 Technical Analysis: Support Break Hints at Downside
- Nikkei 225 Strategy: Ride a resumption of downtrend
- More signs of lower moves ahead: momentum turn, support break
- Index entered 16,300s area, lack of strong support until 15,978. Resistance is 10-day MA at 17,140
JPN 225 broke a previous support at 16,433 which opened up the leeway downward to 16,000 mark. Momentum signals abruptly turned down. Downside risk dominates trading for now thus the focus is on short trades.
Any descent from here would challenge the big 16,000 mark, before a more than 1-year low at 15,978 (October 2014 low). On the topside, 10-day moving average firmly caps price action at 17,140.
Traders with short positions could keep stop wide given the recent correction, or adjust according to market volatility. 10-day moving average is still a good topside indicator at this point, at 17,140.
Daily Chart - Created Using FXCM Marketscope
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.