Nikkei continues to show weakness around the 51k levelJapan 225 CFDFOREXCOM:JP225FOREXcomThe Japanese index has started to show weakness over the last three trading sessions, posting a decline of more than 5% in the short term and reflecting a relevant bearish bias in the chart. For now, selling pressure appears to have re-established itself, partly due to the increase in risk sentiment across markets, which has reduced appetite for risk assets such as the Nikkei. Additionally, a neutral stance from the Bank of Japan limits expectations for rate cuts, strengthening the bond market and reducing the attractiveness of Japanese equities. If these factors persist, a more consistent selling pressure could continue to dominate in the short term. Bearish move becomes more relevant: Over recent sessions, Nikkei price action has started to break below the long-term upward trendline that had been in place for several months. If the bearish bias continues to consolidate, this could lead to the formation of a new short-term downtrend, potentially dominating price action in the coming sessions. However, it is important to note that the price still faces a key resistance area, which could trigger short-term corrective moves. RSI: The RSI remains below the 50 level, suggesting that selling momentum continues to dominate over the past 14 sessions. If this behavior persists, it could reinforce a consistent bearish pressure in the short term. MACD: A similar scenario is observed in the MACD, with the histogram remaining below the zero line, indicating that short-term moving average momentum is still in bearish territory. This supports the view that selling pressure could remain dominant. Key levels to watch: 54,695 – Key resistance level, aligned with the 50-period simple moving average. Moves toward this area could lead to a sideways scenario if no clear direction emerges. 51,030 – Near-term support, aligned with recent lows. A break below this level could reinforce a dominant bearish bias in the short term. 48,433 – Key support, aligned with the 200-period moving average. A sustained break below this level could trigger a more structured downtrend in the coming weeks. Written by Julian Pineda, CFA, CMT – Market Analyst