Talking Points:
- Nikkei 225 continues to pivot around 16,500
- Range between 17,000 and 16,000 looks key in the short term
- Price still trades below 200-day SMA
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The Nikkei 225 is nudging lower today, as the index continues to pivot around the 16,500 level.
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. Indeed, the price is still trading below its 200-day SMA at the time of writing.
This seems to make the range between 16,000 to 17,000 key in the short term. The index is trading in that narrower range for the past few months, with the 16,500 level in the middle indicative of short term momentum.
If the Nikkei manages to break above its 200-day SMA and the 17,000 handle, focus seems likely to shift for a potential attempt on the aforementioned longer term range highs.
On the other hand, a move to the downside might expose the 16,000 level, followed by the range lows around 15,000.
Nikkei 225 Daily Chart: September 30, 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
