Nikkei Looking To Break Out
The current price action in the Nikkei is grabbing my attention this week. While the market has been in an ongoing decline over recent months, framed by the bear channel structure, bullish divergence has been growing. The latest break below the 27422.9 level has now reversed and price is breaking out above the channel top. If price can breach the 28356.6 high, this will mark a near term shift for the index, turning the focus to the 29464.9 level next.
The Nikkei is being helped higher here by calls from Japanese PM candidate Fushida who is urging for a massive new stimulus package to help support the economy. Similarly, the weakness in USD following Powell’s Jackson Hole speech is helping keep the Nikkei turned higher.
Key Data to Watch
The US labour reports at the top of the week will be the key focus for markets with any resultant USD strength likely to cap equities moves. However, any surprise weakness will keep equities well bid in the near term. Broader COVID headlines will also be key to follow this week with any fresh strength in JPY posing a risk to higher prices.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.