The Nikkei 225 index has been underperforming over the last three days and today recorded a three-week low of 23315. The aggressive selling scenario is confirmed by the technical indicators; the RSI dropped below the positive area, after the bounce off the overbought zone, while the MACD is falling below the trigger line but stands above the zero line.
Should the index manage to strengthen the negative momentum, the next immediate support could come near the 23116 level. A break below this level would challenge the medium-term ascending trend line and if this line is penetrated, it would shift the bullish tendency to a more neutral one. The next level for investors to have in mind is the 22174 hurdle.
However, if prices hit the 23116 support and rebound on it, this would turn the risk to the upside again with the 24480 multi-year high coming into focus. Above this level, the next target could come from the psychological levels of 24500, 24600 and 24700.
When looking at the bigger picture the pair has a clear upside trend starting from the low on March 26 and remains above the 20- and 40-simple moving averages (SMA).
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