Nikkei Poised For Another Leg Higher As Wave 5 Approaches

The Nikkei remains in a strong five-wave bullish impulse, and the current structure still suggests that the larger uptrend may not be complete. After an impressive advance, the index recently entered a deeper corrective phase, but the pullback so far appears to be forming a wave 4 correction rather than a major trend reversal.

The recent decline brought the index back toward an important support area, where several technical factors are aligning. Price is holding near the 38.2% Fibonacci retracement level of the previous advance, while also approaching the former wave (4) swing low, which often acts as a key support zone during impulsive structures.

As long as this support area holds, the bullish scenario remains favored. A recovery above the descending channel resistance line would be the first indication that the correction is losing momentum, while a move back above the 68k area would provide stronger confirmation that wave 5 has started.

If the final impulsive wave develops as expected, the Nikkei could enter another strong advance, with the next potential upside targets located around the 75k–80k region. However, the index will need to reclaim resistance levels first, as further sideways consolidation or another short-term dip cannot be ruled out before the final wave higher begins.