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FxWirePro: Nikkei Daily Outlook

Major resistance- 21500 (300- day EMA)

 

Major support - 20700

 

Nikkei has shown a minor decline following the footsteps of Wall Street on a slightly diminishing 50 bpbs rate cut in Jul Fed meeting. According to the CME Fed watch tool, the probability of the 50bpbs rate cut has declined to 22.5% from 24% on Friday. US 10 year yield is trading steady and jumped more than 2% in the past two trading days. It hits an intraday low of 21315 and is currently trading around 21405.

 

US Market- The Wall Street has closed lower with Dow Jones and S&P500 closed at 27154 (0.25%) and 2976 (0.62%).

 

Japanese Yen- USDJPY is trading higher for 2nd consecutive day and jumped more than 80 pips. It is still trading below trend line resistance 109 and this shows the overall trend is weak. Any break above 108.50 confirms minor bullishness. It is currently trading around 107.96.

 

Shanghai composite- Shanghai is trading slightly lower after a minor jump till 2939. It is currently trading around 2907. Any break above 2967 confirms bullish continuation and jump till 3000/3020 likely.

 

Technically Nikkei facing strong resistance around 21500 (300- day EMA) and any major jump can be seen only if it closes above this level. Any close above targets 21642 (61.8% fib)/21800.

 

On the flip side, near term support is around 21000 and any violation below this level will take the index till 20700/20500/20291 (Jun 2nd low).

 

It is good to buy on dips around 21200-225 with SL around 21000 for the TP of 21800.

 

 

By Rangarajan Hariharan
  • Market Data
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