Nikkei: Downside limited

By FXStreet FXStreet (Córdoba) – The Nikkei 225 fell 391 points or 2.10% and closed the day at 18,683.24, weighed by soft manufacturing data in China, despite the latest easing measures taken by the PBoC. Commodities led the way lower in Asia, with the iron and steel sector down by 4.4%, due to its exposure to China.

Japanese banks will be closed on a national holiday this Tuesday, so little is to be expected during the upcoming session, albeit Wall Street’s gains suggest the index may recover some ground.

Nikkei technical view

“Technically, and according to the daily chart, the index already erased most of its Monday gains in electronic trading, although it remains far from Friday’s close near 19,100. Nevertheless, the 20 SMA continues heading higher below the current level whilst the technical indicators have bounced after approaching their mid-lines, and maintain a positive tone, limiting the downside”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the index is aiming to extend above a horizontal 20 SMA while the technical indicators have recovered positive ground, supporting the longer term outlook”.

Support levels: 18,867 18,805 18,732. Resistance levels: 18,942 19,022 19,080.
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Source:: FX Street