Nikkei 225 Technical Analysis: Index Back to 16,500 Support
- Nikkei 225 is currently above the 16,500 support
- Downside momentum may prove limited if buyers emerge
- A break below the 16,500 level might expose prior support at 15,800
The Nikkei 225 is trading above the 16,500 support (at the time this report was written) as the index broke prior short term levels at 17,000 and 16,776, following what appears to be risk aversion moves yesterday.
The Nikkei 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.
After a move above the 17,000 handle, which appeared to be heading for the range top resistance around 17,680-18,000, price moved sharply lower to the 16,500 level, which in the past seemed to act as support.
If the index can close below 16,500, this might put the focus on prior low/support at around 15,800, with interim support at the 16,000 handle.
However, if buyers can emerge and swing price higher, focus may be put on the long term rage top resistance, with interim resistance at 16,776 and the 17,000 handle.
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Nikkei 225 Daily Chart: June 2, 2016
--- Written by Oded Shimoni, DailyFX Research
To contact Oded Shimoni, e-mail email@example.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.