FxWirePro- Nikkei225 daily outlook

Nikkei surged more than 3% from yesterday's low on upbeat market sentiment. It hit a high of 36875 at the time of writing and is currently trading around 36564.

The headline US CPI declined to 2.5% y/y compared to a forecast of 2.6%, while core CPI came in line with an estimate of 3.2%. The lesser-than-expected decline in US CPI has reduced the chance of 50 bpbs rate cut by Fed.

The index holds below the short-term 34 and above 55 EMA and below the long-term moving average (200- EMA) in 4-hour chart.

The near-term resistance is around 37147, any violation above will take the index to  37500/37695/38000. Overall bullish continuation only above 42550.

On the lower side, immediate support stands around 36400, any breach below will drag the index down to 36175/36000/35870. Further bearishness is only below 35000.

Indicator (4- hour chart)

CCI (14)- Bullish

CCI (50)- Bullish

Average directional movement Index - Neutral

It is good to sell on rallies around 36980-37000 with SL around 37500 for TP of 35000.