It has been a subdued morning trading session with the lack of economic indicators to drive significant movement in the Nikkei 225 Index Futures (CME: NIY). The index futures are hovering at a 15-month high following the bulls’ failure to sustainably push above the psychological level ahead slew of economic indicators from Japan.

The index futures are consolidated high ahead of the Japanese unemployment rate and retail sales and the highly anticipated Bank of Japan’s (BoJ) interest rate decision on Friday. The BoJ Governor Kazuo Ueda has reiterated the need to keep the decade-long ultra-loose monetary policy. Still, the market chatter that the Governor may be willing to modify the yield curve control (YCC) policy has helped limit the index futures upside.

Technical

The index futures are consolidating higher after the bulls’ failure to sustainably break above the 28730 resistance level. The bulls could be hoping that the market chatter ahead of the BoJ’s interest rate decision on Friday could push the price action above the 28730 resistance level, a level of significance for the bulls. The BoJ’s interest rate decision will need to weaken the Japanese Yen if the bulls look to test the level of interest at the 29070 resistance level.

However, should the bears look to push the index futures lower, they would need to overcome the support provided by the 50-day moving average (50-EMA). A sustained break below the 50-EMA could help the bears break below the ascending wedge and push the index futures towards the 28350 support level. A break below the 23.60% Fibonacci retracement level could signal bearish momentum and leave the 27890 support level in play.

Summary

The index futures are consolidating higher ahead of an eventful week for the Japanese economy. With the BoJ Governor already emphasizing the necessity to continue with ultra-loose monetary policy, a short-term trading opportunity could exist as the price action breaks above the 28730 resistance level.

Sources: TradingView, Investing.com, The Economic Times.

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