Daily Insights: Nikkei 225 Bullish, GBP/USD Within Bullish Wedge
Matt Simpson | Mar 04, 2015 02:43AM ET
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Nikkei 225: One for the bullish watch list
Price continues to retrace from the highs but there we may be able to form a base over the coming sessions above 18540 swing low. The decline has already begun to ricochet around the 50 DMA and a deeper move down may also see a reaction around the Weekly S1 pivot.
No need to catch a falling knife here though, as we can keep this in our watch list to wait for a swing low to form above the trendline before deciding to re-join the trend.
A break below 18540 and / or the trendline is likely to target 18271-328 support zone.
GBP/USD
I am intrigued to see how price reacts around the 1.53-33 support zone. The fact it is also coiling up within a Bullish Wedge raises the odds of a bounce, which would also tier in nicely with the potential [mildy] bullish channel suggestion on the USD Index, as this implies we may see an interim top on USD before gains resume.
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I expect we could touch 1.533 early London session which could suit a few scalps on the short-side. However when we enter the 1.530-33 zone be on guard for price reactions. A break back above, or a break of the Bullish Wedge, we can expect an initial retracement towards 1.540
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