News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZjVIG https://t.co/f6mraHu6zv
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjKWitK https://t.co/JMsJPQlQ3j
  • 🇳🇱 Consumer Confidence (SEP) Actual: -5 Previous: -6 https://www.dailyfx.com/economic-calendar#2021-09-22
  • A rough start to the week with the cryptocurrency market a sea of red with losses on either side of -10% a common sight.Get your market update from @nickcawley1 here:https://t.co/AUfuM9t7yw https://t.co/lU6HS7fHwr
  • RT @FxWestwater: Gold, Copper Forecast: XAU Eyes FOMC, Evergrande News Sends Copper Flying Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2021/09/22/Gold-Copper-Forecast-XAU-Eyes-FOMC-Evergrande-News-Sends-Copper-Flying.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/x2sC…
  • Heads Up:🇳🇱 Consumer Confidence (SEP) due at 04:30 GMT (15min) Previous: -6 https://www.dailyfx.com/economic-calendar#2021-09-22
  • PBoC liquidity injection + reports that Evergrande will make its next onshore bond payment ($35.88-million on 23 Sept) is bolstering risk appetite here. Yet, there is still no word on the $83.53-million offshore bond payment also due Thursday. Over to you now, Jpow & Co. https://t.co/3an0K2d5T1
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/ewdevfzq9I
  • Bank of Japan: - Outlook highly uncertain amid Covid - Asset purchase outline unchanged - Cuts assessment of production - exports, production impacted by supply side constraints - BBG
  • Heads Up:🇯🇵 BoJ Interest Rate Decision due at 03:00 GMT (15min) Previous: -0.1% https://www.dailyfx.com/economic-calendar#2021-09-22
Nikkei 225 Technical Analysis - Can A Double Top Be Avoided?

Nikkei 225 Technical Analysis - Can A Double Top Be Avoided?

David Cottle, Analyst

Nikkei 225 Technical Analysis Talking Points:

  • The Nikkei 225 has been in thrall to trade-spat fundamentals this week
  • However the technical chart could be suggesting a rather bearish pattern
  • The next few days’ trade could be telling

Find out what retail investors make of the Nikkei 225’s prospects right now at the DailyFX Sentiment Page

The Nikkei 225 has endured a torrid week, with fundamentals perhaps leaning harder on this market than any technical factor.

Worries about a steady ratcheting up in the trade spat between the US and, most prominently, China have seen many indexes in retreat and the Tokyo stock benchmark offers a particularly hard-hit example.

However, the Nikkei’s falls this week have raised one possible technical specter, and it’s an especially frightening one for bulls. The index could be in the process of making a double top, as you can see on the chart below.

Nikkei 225 Technical Analysis - Can A Double Top Be Avoided?

The 21907 area now becomes especially interesting. If we are seeing that worrying double top formation then it becomes the crucial ‘pullback’ low. A fall though it could put the entire climb up from the lows of late March into question.

The situation bears close watching however, as this week’s lurch lower on those trade worries may mean that the Nikkei can erase this formation and get back on the upward track after all. For one thing, it is not obviously overbought. Indeed its Relative Strength Index is rather heading lower towards oversold territory and now stands at a hardly-concerning 52.

Should trade simmer down as the prime market mover then we might see a bounce back up to the 22820 level which preceded this week’s falls. If we do, then the double-top thesis would be in severe doubt and some continuation of the uptrend seen since May 29 can probably be expected.

The bulls’ task then would be to consolidate around that level, and prove they can remain durably at the highs hit so briefly in mid May.

Nikkei 225 Technical Analysis - Can A Double Top Be Avoided?

However, it’s then, arguably, that their real problems will begin. For, to make progress from there, they will have to rise back above the steep falls we saw from the year’s highs which occurred between late January and early February. This will take concerted effort but, while we hold above that pullback low, an attempt, at least probably shouldn’t be ruled out.

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES