After yesterday’s high volatility on the stock markets, today’s Asian session the Japanese Nikkei Stock Average (NKY) opened with a 1.9% decline. However, during the European session the index started growing.
According to the latest statement by the head of the Bank of Japan Kuroda, the regulator is going to continue with its QE program, while a reduction of the short-term interest rate below its current 0.1% can help the economy recovery. The statement raises the prospects for the Japanese stock market and can provide the NKY index with a bullish impulse.
Support and resistance
After it reached the year lows at 17170 in the end of August, at the beginning of the week the NKY rebounded from the support level at 17400 (EMA144 on the weekly chart) and grows towards 19060 (EMA200 on the daily chart), with the support of OsMA and Stochastic.
However, on the 4-hour chart, the price is moving along the descending channel and OsMA and Stochastic give sell signals. The growth is restricted by the resistance levels at 18405 (ЕМА50, ЕМА200 on the hourly chart), 18615 (the upper border of the channel).
The breakout of the important level of 18405 would allow the price to grow to 18720, 19060.
Support levels: 17720, 17400, 17170.
Resistance levels: 18405, 18615, 18720, 19060.
Pending sell orders can be placed at the level of 17950 with targets at 17720, 17550 and stop-loss at 18300.
Pending buy orders can be placed at 18450 with targets at 18700, 19000 and stop-loss at 18150.