Russell 2000 Technical Analysis | Forexlive
On the daily chart below, we can
see that the buyers struggled to break above the 50% Fibonacci
retracement level and the market went into a range. As the
price broke below the trendline the momentum started to switch
in favour of the sellers and eventually they piled in aggressively once the First
Republic Bank reported a 40% fall in deposits reigniting fears
around the banking sector.
The price is now near the strong
support at 1731 and we may likely see a bounce from there without further
negative news.
On the 4
hour chart below, we can see that the 50% Fibonacci retracement level and the
trendline formed an ascending
triangle pattern. Generally, when the price breaks on either side we can see a
strong move afterwards, which is in fact what we got. The next things to watch
for the market is the US economic data with the Jobless Claims and GDP reports
scheduled for today.
On the 1 hour chart, we can see
that the break of the trendline was not really enough to cause a selloff as the
market was also stuck in a range. Once the price broke out of the range, it was
a one-way street to the downside. The price is now bouncing from the support as
the bearish momentum has weakened as we can see from the divergence with the MACD.
The price is most likely to pull
back towards the 1755 swing level where the sellers should be waiting to enter
again the market. A break above the 1755 level should open the door for a
bigger correction towards the support turned resistance of the previous range.