Nikkei 225 Technical Analysis: Index Above Short Term Resistance
- Nikkei 225 currently above the 16,776 resistance level after nine days of congestion
- A hold above 16,776 might imply a move higher to test the longer term range top
- Short term resistance at the 17,000 may cap gains
The Nikkei 225 is trading higher (at the time this report was written) as price moved above the 16,776 resistance level, which is the 0.50 Fib as measured from the April 22 high at 17,769.
The index seemed to be contained inside a narrow range (on a higher time frame perspective) around 16,776 and 16,500 for the last nine trading days, after failing to move above 16,776 on a daily close basis.
The price 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.
With that being said, the attempt for the break above the shorter term resistance might imply a move to the upside is of higher likelihood, if the price remains above 16,776 and further momentum is found. Upside levels of interest may be the 17,000 handle, which may cap gains, followed by the 18,000 range top resistance zone (around 17,680-18,000).
However, if buyers can’t hold the price higher, levels of interest on a move lower may be the 16,500 level, which seemed influential for the last weeks, followed by the 16,000 handle, and the prior support at around 15,800.
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Nikkei 225 Daily Chart: May 25, 2016
--- Written by Oded Shimoni, DailyFX Research
To contact Oded Shimoni, e-mail firstname.lastname@example.org
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.