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Nikkei 225 technical analysis: 23,000 trigger level

By Nathan Batchelor

Nikkei 225 technical analysis shows that a bearish double-top pattern may have formed on the daily time frame. Watch out for a sharp downside move towards the 22,000 level.

The Nikkei 225 is struggling to hold onto recent gains, with the index rapidly moving away from the 24,000 level.

Nikkei 225 analysis shows that the 23,000 level remains a key trigger level for the index this month.

Nikkei 225 medium-term price trend

Nikkei 225 technical analysis shows that price recently reversed sharply from the 24,000 level as the upside momentum in the index remains weak.

Fears over the coronavirus have been capping advances in the Nikkei 225, as Japanese investors become increasingly cautious about increasing bullish bets towards the Nikkei 225.

From a technical perspective, buyers failed to breach the January monthly high during the latest advance, creating a bearish double-top pattern.

Furthermore, the momentum indicator on the daily time frame is currently very weak, and is also creating lower highs.

With these factors in mind, a move back towards the 22,000 level could be on the horizon.

Nikkei 225 short-term price trend

Nikkei 225 technical analysis shows that the index is technically bullish over the short-term while trading above the 23,000 level.

The lower time frames highlight the importance of the index’s 200-period moving average on the four-hour time frame, around the 23,000 level.

A loss of the 23,000 level could see a strong downside move towards the 22,000 level, as a new bearish short-term trend begins.

Traders should be aware that a bearish reversal pattern may also be forming on the lower time frames.

Nikkei 225 technical summary

Nikkei 225 analysis points to an upcoming technical test of the 23,000 support level if bulls fail to move price above the January 2019 high. The 22,000 level should come into focus if the 23,000 level is broken.

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