Where is the support level for the Nikkei 225?www.tradingview.com
The Bank of Japan (BOJ) raised the policy interest rate, the unsecured overnight call rate, from 0-0.1% to 0.25% at its monetary policy meeting on July 31st. This is the first rate hike since the BOJ abandoned its negative interest rate policy in March.
This rate hike is not considered a departure from the accommodative monetary policy stance, given the real interest rate, which remains deeply negative. The BOJ indicated its intention to continue raising the policy rate and adjusting the degree of monetary easing if the economic and price outlook materializes.
The foreign exchange market reacted to this decision with a sell-off of the US dollar and buying of the Japanese yen, leading to a huge appreciation of the yen. This caused the Nikkei 225 to drop sharply for two consecutive trading days, exceeding 2,000 points.
Fibonacci analysis was used to derive support zones for the Nikkei 225 to predict its future movements.
* Low 24,681.74 - High 42,426.77: 0.618 → 35,048.41
* Low 30,487.67 - High 42,426.77: 0.382 → 35,648.17
These support zones have already been breached, and the next support point is 33,554.25.
* Low 24,681.74 - High 42,426.77: 0.5 → 33,554.25
The focus this week will be on whether this support level holds.
