As we previously mentioned in the April 6th Morning Brief, investors are feeling insecure due to the upcoming meeting of U.S President Donald Trump and his Chinese counterpart Xi Jinping, two very influential leaders. It seems they intend to discuss North Korea and different trade issues.
As per the FOMC meeting minutes released overnight, the chances of a U.S fiscal stimulus seem to be fading, which is another reason for the increased uncertainty in the market. As a result, the appetite for the haven assets have increased and investors pulled out of the stock market. This is why we have seen dramatic drops in the Nikkei (from $18778 to $18523 in the Asian session alone).
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Nikkei – Daily Chart
Technical Outlook
At the moment, the Japanese Index, Nikkei, has entered into oversold territory. The RSI is holding below 30 which signals that sellers are exhausted and buyers may enter the market to take advantage of the discounted prices. In addition to this, we can see a hammer pattern in the 1- hour chart which demonstrates a bullish reversal.
Forex Trading Signal: We have recommended buying above $18600, with a stop loss below $18500 and take profit of $18700. Right now, the signal has already gained a 44 points profit and we know what to do next, right? Drag your stops at breakeven!
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