Nikkei 225 Technical Analysis: Index Approaching Prior Support
- Index approaching the 15,000 handle for possible support after turning lower around 15,800
- A break below 15,000 might signal an end to the 2016 sideways movement
- 14,000 handle may be in focus initially in case of further downside pressure
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The Nikkei 225 is nudging lower after finding some resistance around the prior short term 15,800 level.
The index bounced from an area of support between the 0.50 Fib at 14,518 (as was drawn for the last monthly leg higher from the June 2012 low at 8,190 to the June 2016 high at 20,961) and the 15,000 handle.
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 from June 2015 highs.
If the index manages to find strong conviction to move below the 15,000 level, this may mark an end to the 2016 sideways action, which might put focus on possible support at the 14,000 handle and the 13,000 level, which coincides with the 0.618 Fib of the long term uptrend.
A move to the upside may initially target the 15,800-16,000 area for possible resistance, while a break above could expose the 16,500 level, which seemed to be influential in the past for deciding short term directional conviction.
Nikkei 225 Daily Chart: July 7, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com