FxWirePro: Nikkei hits 4-week high on trade optimism, good to buy on dips

Major support - 20700 

Nikkei has jumped more than 400 points on renewed trade hopes and a hint of more stimulus from ECB'S. President Trump tweeted yesterday that "he had a good telephonic conversation" with Chinese President Xi Jinping and further said he will meet at the G-20 meeting. Next up is Fed policy and markets expect the central bank to be more dovish. The rate cut by the Fed will improve liquidity and it will have a positive impact on markets. The index is holding above 21000 levels. It is currently trading around 21330.

US Market- The Wall Street has shown massive gains on trade deal hopes with Dow Jones and S&P500 closed at 26465 (1.35%) and 2917 (0.97%) higher. 

Japanese Yen- USDJPY has shown a nearly 40 pips recovery from low of 108.06 and still trading below trend line resistance 109. This shows an overall trend is still in bearish mode. Any break below 107.80 confirms further bearishness. It is currently trading around 108.30.

Shanghai composite- Shanghai declines is one of the top performers on trade deal optimism. It has jumped more than 1.5% It is currently trading around 2889. Any convincing break above 2945 confirms bullish continuation and jump till 3000/3020 likely.
  
Technically Nikkei broken major resistance 21330 (200- day MA) and this confirms minor trend reversal, a jump till 21508 (300-day EMA)/21642 (61.8% fib)/21800 is possible.

On the flip side, near term support is around 21000 and any violation below this level will take the index till 20700/20500/20291 (Jun 2nd low).

It is good to buy on dips around 21000 with SL 20700 for the TP 21508.