Japanese stocks trade above support zone

Source: Dukascopy Bank SA


Due to the broader fundamental weakness of the Japanese Yen, the Japanese stock index has continued to surge. Namely, the Bank of Japan has continued with its easy monetary policy that has caused a more than 30% surge from the early 2023 lows up to the July high level.

From a technical analysis perspective, the equity index has bounced off the 34,000.00 mark, which has formed a resistance zone at 33,865.00/34,000.00. In the meantime, support has been found since early June in the 31,425.00/31,875.00 range.

A resumption of the broader surge of the equity index might be slowed down by the 50-day simple moving average and the 33,000.00 mark, before the index reaches the 33,865.00/34,000.00 zone. In the meantime, note that the 33,500.00 level acted as resistance in late July.

On the other hand, a potential decline of the index would have to pass below the 31,425.00/31.875.00 range, before approaching the support ranges below it. Further below, support has been found at 30,400.00/30.630.00 and 28,915.00/29,360.00. Note that the second zone has been reached by the ascending 200-day simple moving average.
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