The Nikkei Index Futures (CME: NIY) are enduring a bearish open to the Friday trading session after declining over 0.4% following the release of Japanese inflation data, which showed that the core inflation for May declined to 3.2% year-on-year from the 3.5% achieved in the previous month. The government data showed that inflation continues to remain well above the BoJ’s 2% target.
The bearish momentum continues to chip away from the excellent Thursday trading session for the Japanese equities. The index futures closed the previous trading session 1.50% higher to cap a two-day losing streak as the excellent NVIDIA performance and outlook filtered to the Japanese equities.
The 4H chart shows that the index futures have formed an ascending channel as the bulls look to continue to charter new higher territories on the weakening Japanese Yen. The bulls could be confident to reject the daily pivot point at 30890 to retest the 31100 resistance level, a level of interest for the bulls. A breakthrough in the 31100 resistance level, supported by significant volume, would boost the bulls’ charge towards the 23-year high of 31355.
For the bearish case, the bears would need to break below the daily pivot point in order to test the 23.60% Fibonacci retracement level and the channel support. Should the channel support gives way, the 30420 and 29965 support levels would firmly be in the bulls’ target.
The index futures enjoyed a breather yesterday following the ripple effect NVIDIA’s performance had on the global market. However, with the debt ceiling talks in the US still stalling, the index futures could still be under bearish sentiment in the short term.
Sources: TradingView, Reuters.
DISCLAIMER:This report has been prepared by our Group company. This document is not intended as an offer, solicitation or recommendation to buy or sell financial instruments or to make any investment. The Group has used reasonable efforts to obtain information from reliable sources and the report is provided without representation or warranty of any kind (neither expressed nor implied). The Group disclaims liability for any publication not being complete, accurate, suitable and relevant for the recipient. Specifically, the Group disclaims liability towards any user and other recipients of this report.