Update on Nikkei: Mar 19, 2014

In watching the USDJPY, it makes sense to keep an eye on the Nikkei.  It’s in trouble, having broken down and backtested a long-term channel…

…as well as the 200-day moving average.

It’s most of the way through a H&S Pattern that indicates 11381  — the large scale .618 — if the 13,891 and then 13,196 don’t hold.  There is also good channel support at 13196 (the purple .786) from both the grey and purple midlines.

The increased sales tax kicks in on April 1 (from 5 to 8%), which can hardly be expected to boost consumer spending which, along with consumer confidence, is sagging badly…

…a logical reaction to soaring food and energy prices [for more on the macro picture, see: Sayonara Abenomics.]

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