Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Nikkei 225 Technical Analysis: Bulls Have More To Prove Yet

Nikkei 225 Technical Analysis: Bulls Have More To Prove Yet

David Cottle, Analyst

Nikkei 225 Technical Analysis Talking Points:

  • The Nikkei 225 has seen a strong run of daily rises
  • The fundamental roots of these may not be very deep
  • Key resistance is close but remains unchallenged

Get trading hints and join our analysts for interactive live coverage of all major economic data at the DailyFX Webinars.

The Nikkei 225 has put in a nice run of daily-chart gains in the past week or so.

Fundamentally, its strength seems rooted in hopes for some thaw in US/China trade relations at this weekend’s Group of 20 leaders’ Summit in Argentina. Whether this is well-founded or not, the last couple of days’ US Dollar weakness may yet weigh. Rightly or wrongly investors seem to be dialing back some of the more enthusiastic US rate-hike expectations for 2019. A weaker greenback usually plays poorly on the Tokyo stock market, replete as the Nikkei is with export titans reliant on US spending power.

Technically, however, the bulls probably have more to prove if they are going to make their gains stick. For one thing, they have yet to take the index past its previous significant high. That was the 22,490 area it got up to at the start of this month.

Nikkei 225 Chart (Daily)

Even if the index can get there, the bulls will probably need to get it sustainably back within what’s currently a zone of resistance which starts at that point and continues up to the 23,000 level which was hit in mid October. If the index can break back into that zone and consolidate there, then the peaks of 2018 could come back into view.

However, it hasn’t got there yet and this week’s monthly close could be an interesting directional clue. If the index bows out below that resistance zone, then a test lower will look likely. That could take in support around 21,800 from mid-November, with the trend-line prop around 21,350 perhaps beckoning below that.

If on the other hand the index can end the month within or near that resistance zone then perhaps further gains can be expected.

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter @DavidCottleFX or use the Comments section below to get in touch!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.