Wed, Oct 05, 2022 @ 14:55 GMT
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Nikkei lost -1.33% on Yen’s strength, China SSE gained 1% as government manipulate halted Yuan’s slide

In tandem with the strong rally in the Japanese yen today, Stocks were sold off deeply. Nikkei 225 ended the day down -300.89 pts, or -1.33%, at 22396.99. Technically, 23050.39 proves to be too strong a resistance level for Nikkei.

But still, for now, we’re favoring the bullish case that rise from 21462.94 is resuming whole rebound from 20347.59. Hence, we’d expect strong support at around 55 day EMA (now at 22345.59) to contain downside and break rally resumption. Firm break of 23050.93 will confirm rise resumption for 100% projection of 20347.49 to 2305039 from 21462.92 at 24165.84. That is close to 24129.34 high.

However, sustained break of the 55 day EMA will extend the sideway pattern inside 21462.94/23050.39 in near term.

On the other hand, China Shanghai SSE composite gained 30.27 pts also 1.07% to close at 2859.54. the break of 2848.37 resistance confirm resumption of rebound from 2691.02 low. Sentiments have clearly improved on talks that China has intervened last week to halt the Yuan’s recent free fall.

Further rise should be seen to 55 day EMA (now at 2946.10) and possibly above. But at this point, we’re seeing no prospect of sustained break of 3000 handle. Hence, we’d expect another fall back to retest key support zone between 2016 low at 2638.30 and 2700 at a later stage.

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