Japan’s 225 stock index (cash) got rejected near the 50% Fibonacci retracement of the 24,500 – 28,649 upleg at 26,576 soon after departing from May’s base of 25,508.
The bearish bias is still in play as the RSI is retracing its latest rebound below its 50 neutral mark, while the MACD keeps extending its negative momentum below its red signal line.
If the 61.8% Fibonacci of 25,820 gives way on the downside, the bears will push harder to escape the trap around 25,508 and pressure the price towards the March 16-month low of 24,502. Even lower, the 2020 resistance territory of 24,100 – 23,700 may attract special attention before all eyes turn to the channel’s lower boundary seen around 23,600.
On the upside, the bulls will need to clear the wall at 26,576 in order to meet the 38.2% Fibonacci level at 27,065. The 23.6% Fibonacci of 27,670 and the 200-day simple moving average (SMA) could be the next obstacles on the way up, though a decisive close above the bearish channel at 28,000 will be more meaningful, especially if the index officially violates its downtrend above the March high of 28,649.
All in all, the short-term risk for Japan’s 225 index is skewed to the downside, with traders likely looking for support within the 25,800 – 25,500 zone during the coming sessions.
