Nikkei: downside favored – FXStreet

By FXStreet FXStreet (Córdoba) – The Nikkei soared on Wednesday, closing the day up 2.88% or 511 points at 17,715.63, as the JPY retreated amid decreasing risk aversion. The index posted its first positive close of the year, snapping a six-day losing streak, but fell back in after hours trading, following the steep decline in Wall Street, and pointing to start a new day around 17,200.

Nikkei technical view

“The benchmark’s daily chart suggests the decline may continue during the upcoming hours, as the technical indicators have resumed their declines within oversold territory, while the 20 SMA has extended its decline further below the 100 SMA”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the index has moved back below its 20 SMA, while the technical indicators have reversed their early upward momentum and present tepid bearish slopes within negative territory, in line with the longer term outlook. The key support for this upcoming session is the 17,075 level, this week low, with a break below it fueling the decline towards 16,870, September 2015 low”.

Support levels: 17,162 17,075 17,000. Resistance levels: 17,275 17,355 17,430.
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Source:: FX Street