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Nikkei 225, FTSE 100 track NASDAQ 100 lower​

​​​Nikkei 225, FTSE 100 track NASDAQ 100 lower​ as US yields rise to multi-month highs and some US corporate earnings disappoint.​

Indices Source: Adobe images

​​​Nikkei 225 snaps three-day winning streak as it tracks US peers lower

​The Nikkei 225's rally since this weekend’s election result at which Japan's ruling party lost its parliamentary majority has taken it to Wednesday’s 39,719 two-week high before tracking US markets lower.

​The 200-day simple moving average (SMA) at 38,594 is being revisited ahead of the 55-day SMA at 38,176. While the next lower August-to-October tentative uptrend line at 37,760 and, more importantly, last week’s low at 37,366 underpin, the medium-term uptrend will stay intact.

​A rise above this week’s high at 39,719 would likely engage the late September high at 39,942 and the psychological 40,000 mark.

Nikkei 225 chart Source: IT-Finance.com
Nikkei 225 chart Source: IT-Finance.com

​FTSE 100 falls through key support

​The FTSE 100's fall through its key 8,183-to-8,153 support area following Wednesday’s UK budget has also taken it through the June-to-early July lows at 8,112-to-8,106 and the 200-day SMA at 8,101 with the late July low at 8,056 being next in line ahead of the psychological 8,000 mark.

​Minor resistance above the previous support zone, now because of inverse polarity a resistance zone, comes in at the September-to-early October lows at 8,153-to-8,196. Further up sits Friday’s 8,222 low, above which lies the 23 October low at 8,240. For the bulls to be back in control a rise and daily chart close above Tuesday’s high at 8,326 would need to be seen. Such a bullish reversal currently looks highly unlikely, though.

FTSE 100 chart Source: IT-Finance.com
FTSE 100 chart Source: IT-Finance.com

​NASDAQ 100 form bearish engulfing pattern

​The NASDAQ 100's advance from last week’s low at 19,928 has taken it to a 3 ½ month high at 20,652 on Tuesday, close to its July peak at 20,760, before forming a bearish engulfing pattern on the daily candlestick chart on Wednesday amid higher US Treasury yields and mixed corporate earnings.

​The bearish chart formation points to at least short-term downside pressure being seen ahead of the US 5 November election with the August-to-October uptrend line at 20,030 and last week’s low at 19,928 representing the nearest downside targets.

​A fall through 19,928 could trigger a deeper correction towards the 200-day SMA at 18,877.

​Minor resistance can be spotted at the 20,316 September peak, followed by the 22 October high at 20,455.​​

NASDAQ 100 chart Source: IT-Finance.com
NASDAQ 100 chart Source: IT-Finance.com

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