Nikkei 225 index extends recovery as price tests 39,000 resistance zone
Nikkei 225 consolidates beneath resistance as bulls target 40,000 round number
The Nikkei 225 continued its upward climb on Tuesday, closing the session around 38,942 as investors pushed the index into a critical resistance zone. The rally follows a strong rebound from mid-June lows, where price bounced off support near 36,300 and reclaimed the prior swing high at 38,020.
Highlights
- Nikkei 225 closed near 38,942 after reclaiming its mid-June highs and entering resistance territory
- Index is supported by an ascending channel and rising trendline since late April
- A breakout above 39,200 could unlock fresh momentum toward the 40,000 psychological mark
The daily structure now reflects a well-formed ascending channel, with higher lows and higher highs since April’s bottom near 33,300.
Nikkei 225 index price dynamics (Source: TradingView)
Technically, the index has entered a historically reactive zone between 39,000 and 39,200, an area that previously acted as a supply barrier. If bulls manage to establish firm acceptance above this level, the next upside target sits at 40,000, a major psychological milestone. However, short-term overbought signals and prior rejections suggest the battle at this level could be contested.
Trend momentum remains strong but overbought risks build
The 4-hour chart confirms price support along a short-term rising trendline from June 13, with multiple validations reinforcing bullish control. Indicators such as the Keltner Channels show upper-band tagging and rising slope, reinforcing the presence of sustained directional momentum. However, current price action near 38,999 is pressing the upper channel, indicating limited room for further upside without a brief pause or pullback.
The Fisher Transform indicator shows bullish continuation with a reading of 1.33 above the signal line, but not yet at extreme levels. Meanwhile, the 30-minute chart highlights critical intraday support at 38,830. A breakdown below that pivot could expose the trendline at 38,600, followed by demand near 38,220.
Earlier analysis noted the Nikkei’s breakout above 38,000 as a signal of trend continuation. This latest test of the 39,200 resistance reinforces that view, with bullish structure still intact above 38,600. However, a failure to clear current levels may lead to another structural retest of the April–June accumulation range.
