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J225

Nikkei 225 Index Resumes Its Decline?Nikkei 225 Index Resumes Its Decline? In mid-October, the Nikkei 225 index attempted to break through the psychological barrier of 40,000 points but ultimately reversed direction. This week, the index has continued its downward trend, driven by concerns surrounding the upcoming elections for Japan's House of Representatives scheduled for October 27. According to Reuters, the ruling Liberal Democratic Party (LDP) and its coalition partner, Komeito, may lose their majority in the elections. Meanwhile, technical analysis of the Nikkei 225 chart reveals several bearish indicators: → The lower bounds of both the previously active blue and purple ascending channels have acted as resistance, along with the noted 40,000 level. → The price has broken below the ascending trend line (marked in red) around 39,000, suggesting that bears have gained enough strength to push through. Consequently, the 39,000 level may now serve as resistance. Overall, the situation appears increasingly concerning. Could the rise from point V to C be merely a corrective move following the downward impulse from A to B? If so, a downward reversal from 40,000, coupled with a bearish breach of the trend line, could signal a resumption of the downtrend, potentially leading to a decline towards the 37,000 level, which has previously interacted with the price on multiple occasions. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:J225
by FXOpen
1
Is the Japanese Stock Market Stable Today?Is the Japanese Stock Market Stable Today? On July 11, the Nikkei 225 index (Japan 225 on FXOpen) started to decline. Notably, on July 15, we observed bearish activity around the 41330 level. Interestingly, US stock indices also began to fall on July 11. However, the Japanese stock market saw a more dramatic drop, exceeding 25% by the August 5 low. Has the Japanese stock market continued to fall? No. After a alarming Monday on August 5, the price has been recovering. It closed higher on Tuesday and Wednesday, with bullish signs observed today, Thursday. Analyzing the Nikkei 225 (Japan 225 on FXOpen) chart on Monday, we noted that: → The price dropped to a support block between 30,400 and the psychological level of 30k. → A strong bounce from this block could indicate activated demand (a sign of an emotional selling climax in Wyckoff's terminology). We then suggested that this support block would hold, and the Japanese stock market might enter a consolidation phase to establish a new balance of supply and demand. Today, the technical analysis of the Nikkei 225 (Japan 225 on FXOpen) chart shows: → The price has risen from the support block around 30,400 and is currently near 35,000. → Notably, the price found support at the lower boundary of the linear regression channel, indicating deviations from average values (shown in light purple). The lower boundary acted as support. → The price is below 38,000, where previous supports, including the lower boundary of a significant ascending channel (shown with blue lines), were breached. These are now expected to act as resistance. Thus, after an extremely volatile Monday, the market may continue to develop a consolidation phase with decreasing amplitude, within the range of 30k to 38k. This phase will help establish a clearer consensus on the fair valuation of the Japanese stock market, considering the Bank of Japan's rate hike last week and the risks of a US recession. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:J225
by FXOpen
3
Nikkei Index Falls Below 38,000 Points This Month for First TimeNikkei Index Falls Below 38,000 Points This Month for First Time According to today's Nikkei 225 (Japan 225 on FXOpen) chart, the index quote dropped below 38,000 points at Monday's low, followed by a recovery (shown by an arrow). One of the drivers of the decline was the automotive sector, whose shares led during the downturn. In particular, according to Reuters, Toyota Motors' shares fell by more than 2% as the company faces difficulties due to a certification scandal. Japanese national broadcaster NHK reported that Toyota will extend the production halt for some models until the end of July. The fact that the Nikkei 225 (Japan 225 on FXOpen) price is recovering after dropping below the 38,000 mark suggests a false bearish breakout below this psychological level. Technical analysis of the Nikkei 225 (Japan 225 on FXOpen) chart provides more insight into market dynamics: → Since the beginning of 2024, there has been a sharp rise from point A to point B by more than 20%; → This was followed by a retracement to point C, which constituted a Fibonacci 0.500 proportion of the A→B impulse; → Then there was a rise from C to D, forming a Fibonacci 0.382 proportion of the B→C impulse. Thus, in the first half of the year, there has been a series of diminishing oscillations forming a triangle pattern, indicating a balance between demand and supply around the 38,380 axis. Today's potential bullish reversal (which is not yet fully formed) could confirm the relevance of the triangle's lower boundary and direct the price towards its axis. It is worth noting that the triangle boundaries are narrowing, and a possible imminent breakout of this graphical pattern, formed in the first half of 2024, could lead to the establishment of a noticeable trend. Trade global index CFDs with zero commission and tight spreads. Open your FXOpen account now or learn more about trading index CFDs with FXOpen. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:J225
by FXOpen
1