- Nikkei 225 is currently above the 16,776 resistance turned support
- A hold above 16,776 may imply a move higher
- 17,000 might be a hurdle before the index could test a longer term range top
The Nikkei 225 is trading above the 16,776 resistance turned support (at the time this report was written) as the index appears lacking in conviction to clear the 17,000 resistance level.
The price was able to move above 16,776 on a daily close basis after a period of congestion, but gains from the breakout appear to be capped by resistance around the 17,000 handle.
The Nikkei 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.
If the price remains above 16,776 and further momentum is found to clear the 17,000 handle, this might imply higher probability for a test of the 18,000 range top resistance zone (around 17,680-18,000).
However, if buyers can't hold the price higher, and a move below 16,776 is initiated, levels of interest may be the 16,500 level, which seemed influential for the last weeks, followed by the 16,000 handle, and prior support at around 15,800.
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Nikkei 225 Daily Chart: May 27, 2016
--- Written by Oded Shimoni, DailyFX Research
To cont act Oded Shimoni, e-mail email@example.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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