2 Reasons To Buy The Nikkei
Arslan Butt • 1 min read
This morning the global stock markets are trading slightly bullish. Though we do not see a high trading volume,still the market sentiment seems bullish. As we discussed in our live market update on the Gold, the market first follows the U.S NFP and later continues to trade based on the unemployment rate. That's what is happening in the market right now. The S&P 500 has added +0.13% and Nasdaq soared +0.10% in the Asian session.
There is a positive correlation between the U.S and the Japanese stock markets due to their strong business relationships. Because of the stong USD, the Nikkei has gained around +0.70%. However, there are 2 other reasons behind our Forex Trading Signal for the Nikkei Index.
First – The Japanese economy, which is notorious for deflation has finally come out with improved figures. The Core inflation had improved 0.2% in the month of February which is the highest since April 2015.
Nikkei – Hourly Chart
Second – The Index has crossed above a strong resistance and became the support level of $18750. In addition, we can see 2 test bars in the daily timeframe which have closed exactly above the strong support level of $18665. Aside from this, we can see a crossover in the RSI (above 50) as well as in the 50 periods EMA. Both of our technical friends are suggesting a bullish bias.
Forex Trading Signal: I have opened a buy position above $18753 with a tight stop loss at $18690 and a take profit at $18975. At the moment, the market is very slow. Perhaps, we may see some activity from the U.S traders in the New York session.