The Nikkei 225 remains in a bearish technical structure, with the index trading at JPY 63,262.5 below its 20-day and 50-day simple moving averages, at JPY 63,956 and JPY 63,851 respectively. The Ichimoku cloud between JPY 63,569 and JPY 63,605 also represents overhead resistance, while the SuperTrend level at JPY 64,550 continues to point downward.
Price action has formed a potential bear flag that is described as approximately 80% complete. The pattern is developing after a dominant decline and weak consolidation. Support at JPY 62,435 is the immediate level to watch; a sustained break could put the major swing low at JPY 61,632.5 at risk.
Some indicators suggest limited short-term stabilization. The RSI stands at 44.31 after recovering from oversold conditions, and the price has rebounded from the lower Bollinger Band near JPY 62,441. A higher low at JPY 62,435 and mild bullish RSI divergence on the five-hour timeframe could support a temporary recovery, although declining volume limits the strength of that signal.
Resistance is concentrated in the JPY 63,900–64,550 area, which includes the 20-day moving average, the Ichimoku cloud and the SuperTrend level. A move above JPY 64,550 would invalidate the bearish setup, while the broader downside scenario remains active as long as that resistance holds.
The technical scenario identifies JPY 61,632.5 as the first downside target, followed by psychological support at JPY 60,000 and a 127.2% Fibonacci extension near JPY 58,944. Further weakness could be signalled by RSI falling below 40 and the ADX rising above 25. The analysis also warns of a potential bull trap around JPY 63,950 if the index fails to break convincingly above the resistance zone.
Sources: Investing.com News.