Nikkei 225 slumped 3.67% at 21,142 amid rising fears that the damage in the economy due to coronavirus spread will extend for several months. Japan is cancelling the large public events such as sporting events and concerts, over the next two weeks and will also close public schools as well. Japanese Yen is strengthening against the US dollar as the safe-haven yen attracts strong bids. USDJPY is 0.67% lower at 108.84 testing the 100 SMA.
Nikkei 225 lost over 10% despite some better economic data. The manufacturing output came in above the expectations. The Japan Housing Starts (YoY) came in at -10.1%, below the forecasts of 6.1% in January. Japan Construction Orders dropped -17% in January the previous reading came at 21.4%. Stock markets are now awaiting the economic response from central banks.
Stocks in Wall Street finished lower for the sixth consecutive trading sessions with the three major indices entering correction territory.
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Nikkei 225 had one of the worse weeks since 2008. The technical outlook turned bearish now as the index breached yesterday below the 200-day moving average. Today the Nikkei 225 index dropped to five-month lows as the correction accelerate dafter the index breached the 200-day moving average yesterday.
On the downside the initial support for the Nikkei index stands at 20916 the daily low. A credible break below would open the way for the next support at 20809 the low from September 5th 2019. Next support zone stands at 20555 the low from September 4th 2019.
On the other side initial resistance for Nikkei 225 stands at 21528 daily high. More selling pressure might emerge at 22194 the 200-day moving average. Next resistance level will be met at 22276 the high from February 27th.