Nikkei 225 Bounces back from Support Level
- Strategy: Adjust positions as downtrend shows signs to wane
- Flat momentum signals provide little insight on upcoming direction
- Sideways trading may emerge if Nikkei does not contest 16,000 or resistance level at 16,461.5
The Nikkei 225 has bounced back from the 15,523 support level, although it remained under the 16,000 mark that was broken earlier this week. Flat momentum signals hint at sideways movement in the near term, rather than an upward reversal.
Investors with short positions may keep watch of the 16,000 level, where a topside break might prove to be a strong sign that the recent downtrend has finished. Investors with long positions or those who look to trade the range could investigate opportunities if the 15,523 support level holds firmly into next week. A strong support level comes at 14,963 below that.
Any upward movement from here may first come to test 16,000 then the 16,461.5 resistance level above it. A consolidation period similar to the one occurred during mid to late February may emerge.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Nathalie Huynh, Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.