Talking Points:
- The 16,500 level proved influential in the past and price currently pivots around the price point
- Gains appearing to be corrective in the context of the near term downtrend, OBV divergence
- Clear push to either side from 16,500 may indicate short term momentum
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The Nikkei 225 is trading sideways at the time of writing, pivoting around the 16,500 level.
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.
The 16,500 figure is at about 50% of the 2016 trading range and seemed influential in the past for deciding short term directional conviction.OBV is showing a slight short term divergence on the level from the latest bounce higher.
At this stage, it appears like price is seeing sideways action on the level, which could imply that a push to either side of this price point might prove decisive for short term momentum.
A move to the upside might need to see a alear break above 16,500 and a possible broken trend line resistance in order to threat the 2016 highs.
A move below the 16,000 area, might put the focus on the 15,000 range lows once again.
Nikkei 225 Daily Chart: July 18, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
To contact Oded Shimoni, e-mail oshimoni@dailyfx.com
