Japan 225 (Nikkei 225) Faces Rejection at the 20-Day MA

For most of the previous week, upside forces had a stronger impact on price movement. However, despite this, the market experienced more bearish sessions than bullish ones. Nevertheless, it still retains a significant portion of its previous gains. This price behavior can be attributed to the uncertainty surrounding U.S. trade tariffs.

Key Price Levels

Resistance Levels: 38,000, 38,500, 39,000

Support Levels: 37,000, 36,500, 36,000

Nikkei 225 Surges, Then Reverses After Hitting the 20-Day MA

Japan 225 had a strong start in the previous week, recording significant gains. However, price action has been retracing to lower levels over the past two sessions, while previous gains remain intact.

Currently, price action is below all Moving Average (MA) lines. Similarly, the Stochastic Relative Strength Index (RSI) has formed a crossover in the overbought region, with the lines descending toward the 80 level of the indicator. However, an upward contraction is visible in the last price candle on the chart, suggesting that bullish momentum is already building in the session.

Japan 225 Gains Positive Momentum

While trading activity was predominantly bearish on the daily chart, the 4-hour market reveals that upward forces are making notable progress. Here, a green price candle has appeared above the convergence of the 50-day and 100-day MA lines.

Although this green price candle appears small, it still signals growing bullish momentum. Additionally, the Stochastic RSI has formed a bearish crossover in the oversold region, but the indicator lines are now rising.

Despite these positive signals, bullish traders should remain cautious, as the market still appears vulnerable. Therefore, setting a target at the 37,500 or 37,750 price level would be a reasonable approach.

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