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Nikkei Slips Below Support – Is this because of Trump?

Despite the muted impact from the latest BOJ summary of opinions, the Japanese Index Nikkei dipped to trade at $18945 due to global forces. Today in the early Asian trading session, the Nikkei index opened with a huge gap at $19097 after closing at $19222 on Friday.   

As we discussed in our live market update, Three Major Reasons for a Bullish Gold, the weak dollar prices are hurting the U.S stocks. We already know that the Nikkei follows the DJIA in determining future trends.

In addition to this, global stocks have been impacted by the defeat of the U.S President Donald Trump's healthcare legislation. The dip in U.S stock markets is seen in the Japanese stock market index.

Nikkei Hourly Chart

Nikkei Hourly Chart

 

Technical Outlook

Looking at the 1 – hour timeframe, we can see a strong double bottom pattern which is providing a support to Nikkei at $18901. The RSI is holding 30, whereas the stochastic is below 20. An index has formed a test bar right above the major support level giving us a buy signal.

Trading Signal: We can take up a buying position around  $19000 with a stop loss below $18825 and a take profit at $19050. Fellows, trail your stop loss at breakeven once the markets come into profit.

 
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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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