Nikkei 225 Technical Analysis: Index Heading into Confluence Resistance
- Index continues trading higher after clearing 16,500
- Focus may turn to the 17,000 area which has a confluence of resistance levels
- Break above 17,000 may expose 2016 highs below the 18,000 handle
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The Nikkei 225 is trading higher at the time of writing, continuing its rally after finding support at the 16,000 level.
The 17,000 level might be in focus now for possible resistance. The 200-day SMA is also in proximity, combined with potential trend line resistance as well.
The index has been ranging between the well-defined 18,000 resistance zone and the 15,000 support since the start of the year, with gains appearing to be corrective in the context of the near term down trend from June 2015 highs.
A break above 17,000 may be significant and expose the range highs slightly below the 18,000 level which seems likely to really test buyer’s conviction.
With that said, if price fails at the 17,000 level or moves below 16,500, this may shift focus to the 16,000 handle for potential support, and a break lower could expose the 15,000 range lows.
Nikkei 225 Daily Chart: August 15, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
To contact Oded Shimoni, e-mail firstname.lastname@example.org
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.