Nikkei 225 index price holds above 38,500 as bulls test key resistance zone
Nikkei 225 holds steady above 38,500 as bullish breakout eyes supply zone challenge near 39,300
The Nikkei 225 index is holding firm near 38,500 after decisively breaking above a descending resistance line extending from the March highs. The 4-hour chart shows a firm bullish structure, supported by higher lows along an ascending trendline since late April.
Key Highlights
- Nikkei 225 consolidates near 38,500 after breaking above March downtrend resistance.
- Supply zone between 38,800 and 39,300 poses immediate challenge to bullish continuation.
- Indicators including EMAs, Ichimoku, and Parabolic SAR confirm upward momentum into late June.
Price remains above the critical 38,200 support zone, which has now flipped to demand, reflecting ongoing buyer strength.
Nikkei 225 price dynamics (Source: TradingView)
Despite lingering near key overhead resistance, price action continues to favor the bulls. Daily candles show minimal upper wick rejection, and the lack of sell-side aggression around 38,500 reinforces the stability of the breakout. However, the broader supply zone between 38,800 and 39,300 which is responsible for prior sharp reversals and remains a major test of demand absorption.
Momentum indicators reinforce bullish bias
The index is riding the upper Bollinger Band on the daily chart, while the 20, 50, 100, and 200 EMAs are stacked in perfect bullish alignment between 38,100 and 38,300. A tightening of the Bollinger Bands signals potential for a volatility breakout, with the mean line support at 38,066 offering a cushion if short-term corrections unfold.
Other trend-confirming indicators remain firmly supportive. The Parabolic SAR continues to trail price to the upside, while the Vortex Indicator shows VI+ holding above VI−—a classic bullish continuation signal. Ichimoku analysis on the 30-minute chart also confirms the strength of the move, with price comfortably above the Kumo cloud and both Tenkan and Kijun lines rising. Although the Stoch RSI suggests some short-term cooling, any dip is likely to be met with buying interest above 38,200.
Outlook ahead: watching 39,300 and 38,000 zones
With momentum intact, a successful push through 39,000–39,300 could open the path toward the psychologically significant 40,000 mark. A failure to breach this range, however, risks a pullback toward 38,000–38,100, where the EMA cluster and prior breakout zone converge. Key short-term support lies at 38,225 and 37,682, while resistance caps remain at 38,705 and 39,200.
In earlier analysis, we highlighted a short-term descending triangle pattern that was resolved to the upside, signaling a shift in sentiment. The sustained strength above the breakout zone reaffirms our bullish bias, with focus now turning to supply pressure near 39,300.
