FxWirePro: Nikkei trades lower on escalating trade war, good to sell on rallies

• Asian markets are trading mixed after a huge sell-off in US markets on Monday.US market has closed marginally positive as energy stocks has shown a good jump on account of sanctions on Iran with Dow Jones 24283 (0.12% higher) and S&P500 2723 (0.22% higher). Chinese stocks has declined more than 20% from the Jan high and is into bearish territory. US Trump officials are planning to widen trade war against China by restricting Chinese access to US technology.USDJPY which is the main indicator of geo political tension has shown a good recovery of 80 pips from low of 109.36 and this shows that investors slightly ignoring trade war tension.Nikkei has declined almost 200 points from yesterday’s high. US futures is trading marginally flat with Dow Jones at 24270 (0.01% lower) and S&P500 2723 (0.10% higher). Nikkei is currently trading around 22260 0.36% lower.
   
• USD/JPY has shown a good recovery of almost 80 pips. But upside is capped due to trade worries. The pair hits high of 110.20 and is currently trading around 109.89.
   
• On the lower side, index major support is around 22200 (200- day MA) any break below will drag the index down till 22000/21800.
   
• The near term resistance is around 22450 (55-day EMA) and any convincing break above will take the index to next level till 22640 (20 day MA)/22800.

It is good to sell on rallies around 22400-450 with SL at 22600 for the TP of 22200/21850.