Nikkei 225 Price Outlook:
- The Nikkei 225 broke above resistance around the 20,000 mark and may continue higher
- That said, a daily close above the April swing high would be an encouraging sign for further gains
- Learn the different trading styles to see what type of price action best suits you
Nikkei 225 Technical Forecast: Bulls Seek Daily Close Above April Peak
The Nikkei 225 surpassed the technical barriers around 20,000 early this week in a sign of lingering risk appetite. As I noted last week, “with a series of higher lows established, a break above 20,000 and the subsequent swing high at 20,516 may be crucial if the Nikkei 225 is to continue higher in the weeks ahead.” With the first of two criteria fulfilled, the Nikkei is already knocking on the door of April’s swing high around 20,516 and a another productive session could further the case for continuation.
Nikkei 225 Price Chart: 4 – Hour Time Frame (January 2020 – May 2020)
Since the US session displayed rather tepid risk appetite, bullish resumption in the upcoming Asia session is crucial for the next few days – but less important in the larger picture. With that in mind, the Nikkei looks to be in a confident position in the medium-term even in the event of a minor retracement to support around 20,000. Similarly, the series of higher lows help culminate an encouraging technical backdrop overall.
Since Japan’s economic calendar is very sparse this week, the Nikkei will likely follow broader risk trends and regional sentiment in the form of upcoming Australian and New Zealand data. In the interim, follow @PeterHanksFX on Twitter for updates.
--Written by Peter Hanks, Analyst for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX
