Over the past few trading sessions, Nikkei price action has started to show a neutral to slightly bearish bias, with an average move of around 1.2% over the last two sessions. For now, indecision has remained consistent as the market approaches the Bank of Japan’s policy decision later today.
If the central bank begins to signal short-term inflationary pressures and opens the door to a more aggressive policy outlook, this may not support a recovery in confidence for the index. In that scenario, a more sustained weakness could start to gain relevance in the coming sessions.
Uptrend at risk: Although the index has maintained a consistent bullish structure over recent months—leading to the formation of a long-term upward trendline—recent sessions have started to show notable weakness. Price action is now beginning to test this trendline.
If a more consistent bearish bias develops in the short term, this could lead to a break of the bullish structure, potentially marking a significant structural shift and opening the door to stronger selling pressure in the coming sessions.
RSI: The RSI indicator remains close to the 50 neutral level, suggesting a balance between buying and selling momentum. This points to a phase of indecision, which could evolve into a more defined neutral environment if the behavior persists.
MACD: The MACD histogram shows a similar pattern, gradually moving toward the zero line, reflecting a balance in short-term moving averages. This supports the idea of a low-directionality environment in the short term.
Key levels to watch:
59,511 – Key resistance: Level aligned with recent highs and the main upside barrier in the short term. A move back toward or above this level could re-establish a bullish bias and support a continuation of the uptrend.
54,695 – Neutral zone: Level aligned with the 50-period moving average, acting as a recent equilibrium zone. Price movements around this level could reinforce a range-bound or indecisive environment.
52,059 – Key support: Level corresponding to recent lows. A break below this area could confirm the breakdown of the bullish trendline and open the door to the formation of a new short-term downtrend.
Written by Julian Pineda, CFA, CMT – Market Analyst
If the central bank begins to signal short-term inflationary pressures and opens the door to a more aggressive policy outlook, this may not support a recovery in confidence for the index. In that scenario, a more sustained weakness could start to gain relevance in the coming sessions.
Uptrend at risk: Although the index has maintained a consistent bullish structure over recent months—leading to the formation of a long-term upward trendline—recent sessions have started to show notable weakness. Price action is now beginning to test this trendline.
If a more consistent bearish bias develops in the short term, this could lead to a break of the bullish structure, potentially marking a significant structural shift and opening the door to stronger selling pressure in the coming sessions.
RSI: The RSI indicator remains close to the 50 neutral level, suggesting a balance between buying and selling momentum. This points to a phase of indecision, which could evolve into a more defined neutral environment if the behavior persists.
MACD: The MACD histogram shows a similar pattern, gradually moving toward the zero line, reflecting a balance in short-term moving averages. This supports the idea of a low-directionality environment in the short term.
Key levels to watch:
59,511 – Key resistance: Level aligned with recent highs and the main upside barrier in the short term. A move back toward or above this level could re-establish a bullish bias and support a continuation of the uptrend.
54,695 – Neutral zone: Level aligned with the 50-period moving average, acting as a recent equilibrium zone. Price movements around this level could reinforce a range-bound or indecisive environment.
52,059 – Key support: Level corresponding to recent lows. A break below this area could confirm the breakdown of the bullish trendline and open the door to the formation of a new short-term downtrend.
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.