fbNIKKEI Forecast | Improving data bullish for Nikkei | IFCM UK

Technical Analysis NIKKEI : 2020-08-13

Recommendation for Nikkei Index:

Strong SellSellNeutralBuyStrong Buy

Above 23303.4

Buy Stop

Below 21700.2

Stop Loss

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Senior Analytical Expert
Articles 1592
RSI Neutral
Donchian Channel Buy
MA(200) Buy
Fractals Neutral
Parabolic SAR Buy

Chart Analysis

IFC Markets Tech Analysis

On the daily timeframe the Nikkei: D1 is rising above the 200-day moving average MA(200) which is rising tiself. We believe the bullish momentum will continue after the price breaches above the upper boundary of Donchian channel at 23303.4. A level above this can be used as an entry point for placing a pending order to buy. The stop loss can be placed below 21700.2. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (21700.2) without reaching the order (23303.4), we recommend cancelling the order: the market has undergone internal changes which were not taken into account

Fundamental Analysis

Japan’s economic reports were mostly positive last week. Will the NIKKEI rebound continue?

Japanese economic data in the recent week were positive on balance. While machine tool orders declined over year more than forecast in July, the current account surplus rose in April and household spending decline over year was less than expected in June. And the producer prices decline over year was slower than forecast. Improving Japanese data are bullish for NIKKEI. On the other hand, preliminary Q2 GDP report will be published next Monday, and a steep drop in gross domestic report is expected. Worse than expected GDP report is a downside risk for Nikkei.

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