Nikkei 225 Technical Analysis: Eyeing 2017 Peaks Once Again
- The Nikkei 225 has rejected a downside test which could have meant quite heavy falls
- Indeed, it has retaken 2017’s trading range with some aplomb
- It seems to be holding on in the face of looming holidays too.
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Has the Nikkei 225 dodged a high-caliber technical bullet?
Buyers come back.
It certainly looks like it from this chart. Back on April 11 the index succumbed to a fall which was small in magnitude but potentially bigger in implication because that move snapped to the downside a trading range which had endured for 2017. Indeed, it was put in place by the long climb up from the lows of June 2016.
Strong support was rather scant below that and the entire rise at least from November could have been threatened. That could potentially have taken the index all the way back down to 16898.
However, that fall seems to have been comprehensively rejected by the last few sessions’ action, which has in turn broken a downtrend channel which had been in place for nearly a month:
Indeed, the index looks to be taking aim at the 2017 range peaks once again. They’re in the 19739 area.
The Nikkei has made six attempts to top them this year, without success. However, at this point the fate of a seventh may be less important than whether 2017 range support at around 18788 holds afterwards. At the moment, that is comfortably far away.
And Japan is now set for three straight days of market holidays into the weekend, the so-called Golden Week break. The fact that impetus to take profit before that seems so weak is supportive in itself. As long as the current young uptrend endures, then the Nikkei will look a lot healthier.
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--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.