Nikkei 225 index has recorded a stunning downward rally following the touch on the 23116 resistance level in the prior week and is moving towards the moving averages in the daily chart. The technical indicators, continue to send bearish signals, suggesting that the softness in the market is not over yet. The RSI indicator is in progress to drop below the threshold of 50, while the MACD oscillator posted a bearish crossover with its trigger line.
Should prices decline further and fall below the 20- and 40-day simple moving averages (SMA), near 22440 at the time of writing, it could push the index until the next immediate support of 21830. Then a leg below that level, the price could meet the 21445 level, taken from the low on July 5.
However, if the market manages to pick up speed, the 23116 resistance level could offer nearby resistance. This is a significant area which has been rejected several times in the past. A close above this key level would raise the chances for further increases until the 24200 resistance barrier, identified by the top on January 23.
Having a look at the weekly chart, the index seems to be in a bullish mode over the last two years that found support hurdle on 14821.
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