Nikkei 225 – 13,000 broken, 50% Fib Next

Monthly Chart

The 1st week of June trading is barely over, but the trading range of Nikkei 225 has already overtaken all of the past 2.5 years monthly candle except for the recent past 2 months. Looking at current pace of decline, it may not be surprising to see price getting as long as the one back in Oct 2008, the climax of the Financial Crisis. There are already some signs that this could happen, with price clearing the 13,000 support, with an Evening Star pattern looking likely to form from here. There are still some positives though, with price managing to pull up higher from the 50.0% Fib after breaking it initially. However, stochastic readings suggest that price is en route lower with a bear cycle forming, and momentum certainly seem to be increasing with the widening between Stoch/Signal line, with Signal line itself just clearing the 80.0 mark.

Fundamentally, this decline look set to stay with Finance Minister Aso saying today that the Government will not intervene despite the recent slide in USD/JPY and stocks. This is basically a free pass for speculators to push price lower with little regard, and traders who were previously hoping to see some Governmental action from here out will definitely be grossly disappointed.

More Links:
USD/JPY Technicals – Breaking Multiple Support but 96.0 Firm
NZD/USD – Multi Year Trendline Breaking Imminent
Gold Technicals – Quest to 1,420 Act II

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