Talking Points:
- Index higher after finding support below 16,000
- The Nikkei 225 continues to pivot around the 16,500 level
- Focus may turn to 17,000 for possible resistance ahead
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The Nikkei 225 is trading higher at the time of writing, for the third consecutive day, after the index found support at the 16,000 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.
After forming a “bearish engulfing” pattern just below the 17,000 figure and a trend line resistance, price traded lower and found support with impressive accuracy at the 16,000 area we highlighted in the last reports.
The 16,500 level continues to prove influential for short term momentum, and a hold above the level might put the focus on the 17,000 handle for possible resistance.
A break above the 17,000 handle could expose the 2016 range highs below 18,000.
A move below 16,500 may have eyes on the 16,000 again, and a break lower could expose the 15,000 range lows.
Nikkei 225 Daily Chart: August 8, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
To contact Oded Shimoni, e-mail oshimoni@dailyfx.com
Follow him on Twitter at @OdedShimoni
