Nikkei 225 (JPN225) Potential Bullish Reversal from Demand ZoneAnalysis Summary
Resistance Zone and Weak High: The price previously reached a high around 40,200, forming a weak high within a resistance zone. If the price approaches this level again, it may encounter selling pressure, but a breakout could signal a continuation of the bullish trend.
Break of Structure (BOS) and Change of Character (CHoCH): The recent BOS and CHoCH events indicate a potential shift in momentum. The BOS on the upside suggests a bullish structure, but the CHoCH warns of a possible retracement.
Demand Zone Support: A significant demand zone lies between 38,690 and 38,234. This area may act as a support level if the price retraces down to it, providing a potential base for a bullish reversal.
Potential Reversal Target: If the price finds support in the demand zone and reverses upward, the weak high and resistance zone around 40,200 could be the primary target for a bullish move.
Potential Scenarios:
Bullish Reversal from Demand Zone: If the price moves into the demand zone (38,690–38,234) and finds buying interest, a bullish reversal could follow, targeting the weak high around 40,200. This would align with the bullish structure indicated by the recent BOS.
Continuation of Bearish Retracement: If the price fails to hold in the demand zone, a further decline toward lower support levels would be possible, which would weaken the bullish outlook.
Conclusion
The Nikkei 225 is approaching a demand zone, where a bullish reversal could emerge, supported by the recent BOS indicating an uptrend. Traders may look for buying opportunities within 38,690–38,234, aiming for a potential upside move toward 40,200. Monitoring price action in the demand zone will be crucial for confirming the reversal setup.
