nikkei 225 daily outlook tues 15 sep pull back before potential new rise above 18000 support 1303852

(Click to enlarge chart)

Key elements

• Earlier this morning, the Japan 225 (proxy for the Nikkei 225) has rallied and banged into its short-term trendline resistance linking the highs since 10 September 2015 @5pm at 18320.
• The hourly (short-term) Stochastic has reached its extreme overbought level which suggests the risk of a pull-back in price action of the Index after the earlier swift upside movement.
• The short-term support at 18000 confluences with the 76.4% Fibonacci retracement of this swift up move from 15 September 2015 low @12 am to the current 15 September 2015 high @8am.

Non-technical factors

• Japan central bank, BOJ monetary policy meeting today where interest rate decision will be out at 0300 GMT (11am, Singapore time). Market consensus is expected a no change in the policy overnight rate at 0.1%.
• More emphasis on the BOJ’s governor, Kuroda’s press conference to see whether there will be a signal to expand its current monetary stimulus in the near future in light of the recent  weaker than expected economic data such as CPI, household spending and industrial production

Key levels (1 to 3 days)

Pivot (key support): 18000

Resistance: 18320 & 18740

Next support: 17710 (weekly pivot)

Conclusion

Do expect an increase in volatility due to BOJ press conference on the direction on its future monetary policy. Technically, we do expect a potential pull-back below the 18320 intermediate resistance but not beyond the 18000 daily (short) pivotal support before a new potential rise occurs to target the 18740 resistance.

On the other hand, a break below the 18000 daily pivotal support may see a deeper slide towards the 17710 weekly pivotal support.

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.