Nikkei 225 Technical Analysis: Bullish Developments Threatening Resistance
- Nikkei 225 broke above key resistance at 17,000
- Price trading above 50 and 200-day moving averages as the 50 average crosses over
- Trend line resistance and the 18,000 handle up ahead as resistance
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The Nikkei 225 is trading higher as the index is showing a number of positive technical developments.
Nikkei 225 prices have 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.
With that said a confluence of bullish technical signs are currently painting a more positive picture.
The index broke above key resistance at 17,000 and is currently trading above both its 50 and 200-day moving average.
The 50 day moving average has crossed over the 200 MA, which is usually interpreted as a bullish technical sign.
Taken together, this may imply that the Nikkei could be attempting a continuation of the longer term uptrend from the 2011.
With that said, for that scenario to really come into play the index will need to clear the descending trend line from August 2015 as an initial sign, with the larger hurdle being the resistance zone below 18,000.
Levels of support in the short term may be 17,000 followed by the 16,500 level.
Nikkei 225 Daily Chart: October 25, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.