JAPAN NIKKEI 225

Japanese equities are rising and the Japanese Yen is weakening. These two are not very common comments when we take the Nikkei 225 and USD/JPY medium/long-term price trends into consideration. Nikkei 225 Index has been trending lower in a wide trend channel over the past 3 years. Wide swings have bounced off the boundaries of the downward trend channel several times. With the latest rally from 9,000 levels Japan’s Nikkei 225 Index breached above the 3 year-long trend resistance at 9,850 levels. This is a powerful move and could be the beginning of a larger-scale upward trend. Index will challenge the horizontal resistance at 10,250 levels in the following days. For the latest breakout to be valid and result in further strength towards 11,000-12,000 area, Nikkei 225 Index should not fall below 9,800 levels. In other words index should maintain its move outside of the trend channel.