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Nikkei 225 technical analysis: positive bias in place above 22,500

By Nathan Batchelor

17:30, 22 July 2020

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In this article:
J225
Japan 225
27646 USD
147 +0.540%
J225
Japan 225
27646 USD
147 +0.540%
J225
Japan 225
27646 USD
147 +0.540%
J225
Japan 225
27646 USD
147 +0.540%
J225
Japan 225
27646 USD
147 +0.540%

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Nikkei 225 technical analysis

The Nikkei 225 has been steadily rising over recent sessions, as global equity markets continue to enjoy strong dip-buying interest.

Nikkei 225 analysis shows that the index has a positive trading bias while the price trades above the 22,500 level.

Nikkei 225 medium-term price trend

The Nikkei 225 index is approaching the 23,000 level, as traders continue to buy any meaningful dips in the index.

Nikkei 225 technical analysis shows that a rising wedge pattern is forecasting that the index could trade towards a new all-time high.

The daily time frame shows that the rising wedge pattern is located between the 22,500 and 24,200 levels.

Nikkei 225 technical analysis

The projected target of the rising wedge is just above the index’s current all-time high, around the 24,100 level.

A large inverted head-and-shoulders pattern will form on the daily and weekly time frame if the price reaches 24,100.

XRP/USD

0.41 Price
-0.540% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 0.00322

BTC/USD

23,369.25 Price
-0.200% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 60.00

Oil - Crude

73.41 Price
-3.570% 1D Chg, %
Long position overnight fee -0.0223%
Short position overnight fee 0.0065%
Overnight fee time 22:00 (UTC)
Spread 0.03

Natural Gas

2.41 Price
-2.390% 1D Chg, %
Long position overnight fee -0.1138%
Short position overnight fee 0.0796%
Overnight fee time 22:00 (UTC)
Spread 0.005

Traders should be aware that the size of the bullish inverted head-and-shoulders pattern implies that the index could rally towards the 32,000 level over the long term.

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Nikkei 225 short-term price trend

Nikkei 225 technical analysis shows that the index has a strong bullish bias while the price trades above the 22,500 level.

The four-hour time frame shows that a bullish ascending triangle pattern will form if the price reaches the 23,200 resistance level.

Nikkei 225 technical analysis

According to the size of the ascending triangle pattern, the Nikkei 225 could rally towards the 23,700 level over the short term.

Any sustained moves below the 22,500 support level may trigger technical selling, with 22,200 and 21,800 the strongest levels of near-term support.

Nikkei 225 technical summary

Nikkei 225 analysis shows that short and medium-term bulls could be preparing to break the multimonth trading high, around the 23,200 resistance level.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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