Nikkei 225 index price consolidates below 38,500 as triangle structure nears breakout point
Nikkei 225 compresses near 38,500 resistance as triangle formation nears apex
The Nikkei 225 is trading in a tightening range just below key resistance at 38,500, as the index enters a crucial technical phase marked by declining momentum and compressed price action. The 4-hour and daily charts show repeated rejections from the 38,460–38,500 zone, forming a descending triangle pattern with firm support around 38,000. This structure suggests a potential volatility breakout is approaching as price coils toward the apex.
Key highlights
- Nikkei 225 faces resistance at 38,460–38,500 amid descending triangle formation
- Momentum weakens with RSI below 45 and MACD signaling bearish bias on 30-minute and 4-hour charts
- Price holds above long-term support at 36,728; breakout or breakdown likely in coming sessions
Momentum indicators are deteriorating. On the 30-minute chart, RSI has slipped below 45, and MACD has crossed into negative territory with red histogram bars increasing—both signaling short-term weakness.
Japan 225 index chart (Source: TradingView)
The 4-hour RSI is now under the 50-neutral line, while MACD is flattening, showing reduced conviction from bulls. A decisive breakdown below 38,000 could trigger a decline to 37,798, and possibly 37,230, which aligns with historical support.
Long-term structure remains constructive if key levels hold
Despite near-term pressure, the weekly chart maintains a broader bullish structure. The index continues to trade above the 0.618 Fibonacci retracement level at 36,728 from the March low, and the EMA cluster between 37,200 and 37,900 provides technical backing. However, the failure to close above 38,280—the upper edge of the 0.786 Fib zone—has limited upside follow-through. Daily Bollinger Bands are beginning to contract, a signal that price is compressing ahead of a larger move.
A breakout above 38,500 would likely trigger a bullish continuation toward the previous high of 40,398, while a confirmed breakdown could reintroduce broader consolidation within the 37,000–38,000 range. Traders are advised to monitor closing behavior at both 38,000 and 38,500 for confirmation.
In previous analysis, we noted that 38,200–38,500 represented a major resistance band, and a breakout above this level would be necessary to resume the uptrend. That zone remains in play, and with momentum indicators turning cautious, the index is at a critical juncture where either direction could dominate in the near term.
