Nikkei 225 index price holds above 38,200 as bulls defend Fibonacci pivot
Nikkei 225 consolidates below 38,500 as price retests key demand zone after recent breakout
The Japan 225 index is holding steady near 38,226, just above a key Fibonacci retracement level that has emerged as a mid-term pivot for traders. After recovering from April’s lows, the index has reclaimed the 0.618 Fibonacci level at 36,728 and is now testing the 0.786 level near 38,200.
Key highlights
- Nikkei 225 trades near 38,226 after reclaiming the 0.786 Fibonacci retracement
- Short-term rejection from 38,495 leads to retest of demand around 38,200
- EMA structure remains bullish, while RSI and MACD hint at short-term cooling
Analysts view this zone as critical to determining whether a full recovery toward 40,000 remains on the table, or if a return to consolidation lows is likely.
Demand zone retest as momentum eases
The index recently broke out from a falling wedge pattern on the daily and 4-hour charts, surging toward a high near 38,495 before retreating. The pullback has brought price action back into the 38,200–38,250 demand zone, a region that now acts as immediate support. If this area fails to hold, traders may see the index revisit the broader breakout zone between 37,700 and 37,800.
Japan 225 index price dynamics (Source: TradingView)
Despite the cooling, the 4-hour chart continues to show bullish alignment across the 20, 50, 100, and 200 EMAs, clustered between 37,232 and 37,834. The index is currently consolidating near the midline of the Bollinger Bands, after rejecting the upper band at 38,501. This suggests temporary exhaustion, but the overall trend structure remains intact unless a clear break below 37,800 occurs.
Short-term indicators call for caution
On the 30-minute chart, momentum indicators have started to roll over. RSI has pulled back from overbought levels to 52.31, while MACD has turned bearish, indicating a potential short-term correction. Price has also rejected the 38,450–38,500 intraday supply zone, marked by upper shadows and bearish follow-through. A further drop below 38,000 could shift sentiment, but a bounce from 38,200 would keep the bullish bias alive.
In our earlier coverage, we noted the breakout from wedge resistance and reclaiming of key moving averages. The latest structure remains supportive of further upside as long as 38,000 holds, with 39,200 and 40,000 still valid technical targets.
