Talking Points:
- Nikkei 225 Strategy: Ride along with topside resumption in the short term
- Upturn resumes toward 38.2% Fibonacci at 16,831.1
- Clear momentum signal reinstates the short term move
JPN 225 eventually broke the 16,335 resistance level and is heading up to a new resistance and 38.2 % Fibonacci at 16,831.1. This is a good sign for investors who bet on a rebound from the 14,963 bottom. All signs point to higher prices for now, although it is still unclear how far the JPN could carry on.
This breach effectively completed recent consolidation period. Downside potential becomes limited with a firm support and previous bottom at a safe distance below it.
Traders should exercise caution at this early stage of upside resumption, since any change in short term momentum may render this invalid. Those with long positions could consider target adjustment if/when upward momentum fades out.
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Daily Chart - Created Using FXCM Marketscope
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh
