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Talking Points:

- Nikkei 225 held below the 16,776 resistance level on continuous tests

- Price seems to pivot around the 16,500 level

- The index appears lacking in directional conviction at the time.

The Nikkei 225 is treading water as price remains contained below the 16,776 resistance level, which is the 0.50 Fib as measured from the April 22 high at 17,769. The 16,776 level has been tested on a number of occasion throughout the trading week, but the price appears to fail closing above it at the moment.

With that being said, the index seems to pivot around the 16,500 level, which also appears to act as support, thus containing price within a narrow range (on a higher time frame perspective) around 16,776 and 16,500.

The Nikkei has been ranging between the well-defined 18,000 resistance zone and the 15,000 support since the start of the year. On shorter term basis, it seems as if the price might need to find some conviction above 16,776 or below 16,500 for further momentum.

Upside levels of interest may be the 17,000 handle followed by the 18,000 range top resistance zone (around 17,680-18,000).

Levels of interest on a move lower may be the 16,000 handle followed by the prior support at around 15,800, with the range bottom at 15,000. Interim support might be found at the April 7 low at around 15,380.

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Nikkei 225 Daily Chart: May 20, 2016

--- Written by Oded Shimoni, DailyFX Research

To contact Oded Shimoni, e-mail oshimoni@fxcm.com

original source

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