FxWirePro: Nikkei trades higher on US-China trade optimism, good to buy on dips

Major support - 20700

Nikkei recovers nearly 300 point òn progress of trade deal between the US and China. US President Trump said on Wednesday that trade deal with his Chinese counterpart Xi Jinping was possible this weekend. Markets are awaiting the outcome of Trump and Xi Jinping meeting in the G20 meeting for further move.

US Market- The Wall Street has closed flat with Dow Jones and S&P500 closed at 26536 (0.04%) and 2913.80 (0.12%) lower.

Japanese Yen- USDJPY has halted its 6 days of weakness and jumped more than 100 pips. The pair is still in bearish mode and any reversal can be seen only above 109. It is currently trading around 108.06.

Shanghai composite- Shanghai has taken support near 55- day EMA and shown a more than 2% jump on `trade deal truce. It is holding above 3000 level and a jump till 3050.

Technically, the index is facing strong support around 21100 (20- day MA) and any violation below will drag the Nikkei till 20675/20465/20200.

On the higher side, near term resistance is around 21330 and any violation below this level will take the index till 21589/22000.

It is good to buy on dips around 21200 with SL around 21000 for the TP of 21589/22000.