Talking Points:
- Nikkei 225 Strategy: Consolidation with downside bias
- Upside is restricted until a breach of 16,335 resistance
- Signals point to further downside development
JPN 225 is facing tough resistance level at 16,335 on a 7th consecutive day. Downward momentum dominates in the near term hence this situation is unlikely to avert this week. A breach of resistance would be required for the uptrend to resume.
Traders with long position may keep stop close to 76.4% Fibonacci and support level at 15,545, in case the consolidation turns into a downward reversal. There is little chance of topside extension for the rest of this week.
The consolidation on the other hand does not present opportunities to range traders as there is no provision for downside development either.
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh
