Nikkei 225 Technical Analysis: Index Testing Prior Support
- Nikkei 225 is currently below the 16,500 prior support
- A hold below 16,500 might expose the 16,000 handle
- A daily close above 16,500 may be required for upside gains
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The Nikkei 225 is trading below the prior 16,500 support (at the time this report was written) as it appears the index continues to pivot around the level in search of directional conviction.
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 three day losing streak, and a break below prior support at 16,500, the index now appears to be testing the level again, which may cap gains and turn to resistance.
If price holds below 16,500, this might put the focus on prior low/support at around 15,800, with interim support at the 16,000 handle.
With that being said, if the Nikkei can find some positive upside momentum along with other risk correlated assets, this may expose interim resistance at 16,776 and the 17,000 handle, with the big range resistance lurking at the top.
Nikkei 225 Daily Chart: June 6, 2016
--- Written by Oded Shimoni, DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.