The Japanese index has started to show weakness over the last three trading sessions, posting a decline of more than 5% in the short term and reflecting a relevant bearish bias in the chart. For now, selling pressure appears to have re-established itself, partly due to the increase in risk sentiment across markets, which has reduced appetite for risk assets such as the Nikkei. Additionally, a neutral stance from the Bank of Japan limits expectations for rate cuts, strengthening the bond market and reducing the attractiveness of Japanese equities. If these factors persist, a more consistent selling pressure could continue to dominate in the short term.
Bearish move becomes more relevant: Over recent sessions, Nikkei price action has started to break below the long-term upward trendline that had been in place for several months. If the bearish bias continues to consolidate, this could lead to the formation of a new short-term downtrend, potentially dominating price action in the coming sessions. However, it is important to note that the price still faces a key resistance area, which could trigger short-term corrective moves.
RSI: The RSI remains below the 50 level, suggesting that selling momentum continues to dominate over the past 14 sessions. If this behavior persists, it could reinforce a consistent bearish pressure in the short term.
MACD: A similar scenario is observed in the MACD, with the histogram remaining below the zero line, indicating that short-term moving average momentum is still in bearish territory. This supports the view that selling pressure could remain dominant.
Key levels to watch:
54,695 – Key resistance level, aligned with the 50-period simple moving average. Moves toward this area could lead to a sideways scenario if no clear direction emerges.
51,030 – Near-term support, aligned with recent lows. A break below this level could reinforce a dominant bearish bias in the short term.
48,433 – Key support, aligned with the 200-period moving average. A sustained break below this level could trigger a more structured downtrend in the coming weeks.
Written by Julian Pineda, CFA, CMT – Market Analyst
Bearish move becomes more relevant: Over recent sessions, Nikkei price action has started to break below the long-term upward trendline that had been in place for several months. If the bearish bias continues to consolidate, this could lead to the formation of a new short-term downtrend, potentially dominating price action in the coming sessions. However, it is important to note that the price still faces a key resistance area, which could trigger short-term corrective moves.
RSI: The RSI remains below the 50 level, suggesting that selling momentum continues to dominate over the past 14 sessions. If this behavior persists, it could reinforce a consistent bearish pressure in the short term.
MACD: A similar scenario is observed in the MACD, with the histogram remaining below the zero line, indicating that short-term moving average momentum is still in bearish territory. This supports the view that selling pressure could remain dominant.
Key levels to watch:
54,695 – Key resistance level, aligned with the 50-period simple moving average. Moves toward this area could lead to a sideways scenario if no clear direction emerges.
51,030 – Near-term support, aligned with recent lows. A break below this level could reinforce a dominant bearish bias in the short term.
48,433 – Key support, aligned with the 200-period moving average. A sustained break below this level could trigger a more structured downtrend in the coming weeks.
Written by Julian Pineda, CFA, CMT – Market Analyst
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.