Nikkei 225 set for correction towards 0.382 Fibonacci level
The Nikkei 225 Index (often called the Nikkei or JAP225) is a stock market index that represents the performance of 225 leading companies listed on the Tokyo Stock Exchange. It is widely regarded as a barometer for the Japanese economy, similar to how the Dow Jones Industrial Average represents the U.S. economy. This index is highly influential in financial markets, and its movements are closely watched by investors globally. Today, traders will be paying close attention to several key indicators from Japan’s economic data, including the Bank of Japan’s release of the Tankan indices, a critical measure of sentiment in large manufacturers and non-manufacturers. A stronger-than-expected result could signal improved business conditions and bolster the Japanese yen. Additionally, Japan’s Purchasing Managers’ Index (PMI) will be watched closely to gauge the health of the manufacturing sector, which is crucial for the country’s export-driven economy. The data today could offer insights into potential shifts in Japan’s economic outlook, impacting both the Nikkei 225 Index and the yen.
Chart Notes:
• Chart time-zone is UTC (+03:00)
• Candles’ time-frame is 4h.
The Nikkei 225 Index on the H4 chart shows an upward momentum, with the trendline indicating a positive slope despite recent bearish candles. This suggests that the bullish trend may pause temporarily, but the overall trajectory remains positive. It is likely that the bearish candles will continue until they reach the support line, after which a bounce towards the upward trend could be expected. The divergence between the recent lows supports the continuation of the upward trend. According to Fibonacci retracement levels, the 0.382 level around 39,799 could serve as a key target for the correction’s end. The RSI (Relative Strength Index) is currently indicating a neutral to slightly overbought condition, implying that the market may be slightly overheated but not yet in extreme territory. If the RSI dips back below the 70 level, it could confirm a continuation of the uptrend. The MACD (Moving Average Convergence Divergence) is showing a bullish cross, which aligns with the overall trend but also suggests that we may see some downward pressure in the short term as the market consolidates. The 9-period Simple Moving Average (SMA) is tracking slightly above the price action, suggesting upward momentum but highlighting potential risk if the price breaks below the support area.
•DISCLAIMER: Please note that the above analysis is not an investment suggestion by “Capitalcore LLC”. This post has been published only for educational purposes.
