Nikkei: lower lows and highs favor a downward continuation – FXStreet

By FXStreet FXStreet (Córdoba) – The Japanese Nikkei lost 2.43% or 389 points, closing the day at 16,017.26 on Thursday, as Chinese stocks plummeted 3.23%, leading the way lower. Also weighing on the Nikkei were comments from BOJ Governor Kuroda, who said that the Central Bank will adjust its monetary policy without hesitation if such action is necessary to achieve its 2% inflation goal, fueling speculation of more stimulus being added during the upcoming meeting.

The index recovered some ground after the close, following European and American indexes higher, and points to open the day above 16,300.

Nikkei technical perspective

“The technical picture however, is still bearish as in the daily chart, the benchmark set a lower low and a lower high, whilst the technical indicators remain within oversold territory with no signs of changing bias”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart the index remains below a bearish 20 SMA, while the technical indicators lack directional strength well below their mid-lines, after bouncing from oversold readings”.

Support levels: 16,232 16,117 15,991. Resistance levels: 16,392 16,408 16,511.
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Source:: FX Street