The iShares MSCI Japan ETF (EWJ) has broken below a key price level after Trump tariffs rattled global markets. Short interest is likely to rise above recent resistance and may return to previous highs as traders increase their bearish bets on Japan’s market.

EWJ, the ETF designed to track the performance of the Japanese market, stock price and short interest have been trading in channels over the past 6 months.

The stock price (solid green) has met resistance 2x at $71/share (top dotted green), both in Dec and March.

The short interest (solid orange) has bounced off support 2x over this same time frame, hitting lows at 11 million shares (bottom dotted orange) both in Oct and Feb.

With global markets suffering from the recently announced Trump tariffs, EWJ has unsurprisingly broken through the zone/lower channel to the downside.

Anticipate short interest to similarly break through its resistance level of 14 million (upper orange dotted line) to revisit recent highs of 15 million shares short, in the very near future.

If demand to short continues its trend upwards we may see polarity ensue, where former resistance becomes new support at 14 million shares.

As EWJ breaks through price support for the first time in months, traders are poised to increase short interest past previous ceilings. If the pattern holds, the 14 million share mark may flip from resistance to support, signaling sustained bearish conviction in the Japanese equity market.

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