Nikkei 225 Index: Stiff resistance forms around 23,600

Nikkei 225 Index fell for second straight day on Tuesday.
US-China trade conflict continues to weigh on global equity indexes.

Eren Sengezer FXStreet

After closing the first day of the week with a loss of 0.3%, the Nikkei 225 Index pushed lower on Tuesday as caution over the December 15 deadline for the US' tariff hike on Chinese imports continues to weigh on sentiment. During an interview with Fox Business on Tuesday, US Commerce Secretary Wilbur Ross noted that having a good deal for the US was more important than the tariff hike.

Reflecting the dismal mood, major European equity indexes are losing more than 1% and the S&P 500 futures are down 0.3% to suggest that Wall Street is likely to start the day in the negative territory.

Nikkei 225 Chart

Looking at the daily chart, the index seems to be making lower highs below the 23,600-23,650 area, where the 2019-top that was defined back in early November is located. On the same chart, the RSI indicator continues to move sideways a little above the 50 mark, pointing out to a neutral near-term outlook.

The initial support for the index could be seen at 23,300 (20-day MA) ahead of 23,000 (psychological level) and 22,800 (Fibonacci 23.6% retracement of September-November rally). On the upside, 23,600-23,650 is a significant hurdle before the index could target 24,000 (Sep. 25, 2018, high) and 24,480 (all-time high).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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