FxWirePro short-term call: Sell Nikkei225 targeting 18200

Over the past three months or so, the Japanese stock index Nikkei225 has declined almost 5 percent as it declined from around 24500 area (JPN225 - CFD of Nikkei 225) in October to 21700 as of today. The geopolitical tensions between the United States, and many countries in the rest of the world over changed policies of the Trump administration has created a sense uncertainty among investors, while the volatility has been moving higher thanks to central banks’ winding up of the easing policies that began in the aftermath of the 2008/09 ‘Great Recession’.

Our calculations suggest that amid these uncertain factors, where the United States’ policies are increasingly hostile towards China, especially in terms of trade, technology, and military, as well as Russia, and soured towards the European Union, more pain is in store for the Nikkei500.

Trade idea:

Sell JPN225 (CFD of Nikkei225) at the current rate of 21700 and at each rally of 100 points with a stop loss around 22800 area and a target around 18200 area. We expect the current rally to run into heavy selling around 22100 area.