Russell 2000 Technical Analysis | Forexlive

Despite threats of two or
more rate hikes this year, the Russell 2000 came back to like as the regional
banking crisis subsided and strong US economic data is giving the market soft
landing vibes. The market has been focusing more on the resilience of the economy
rather than the risk of more rate hikes, so we should expect more higher highs
as long as the data remains strong.

Russell 2000 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Russell
2000 bounced back strongly on the previous resistance turned support at 1820
where we had also the 50% Fibonacci retracement level.
The rally accelerated as the US Consumer Confidence report came in much better
than expected and led the market to believe in a soft-landing scenario. The
price is now testing again the 1920 resistance zone and
a break higher will be key for the buyers as it will likely cause a bullish
wave all the way up to the 2030 level.

Russell 2000
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see the big spike up
caused by the consumer confidence release that led to a break above the
downward trendline and a
bullish moving averages
crossover. That move opened the door for more bullish momentum and eventually
the price reached the 1920 resistance zone. Here’s where we should see the
sellers stepping in with a defined risk above the resistance and target the
1820 support again. The buyers, on the other hand, will want to see the price
breaking higher to pile in and extend the rally towards the 2030 level.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
latest move higher was diverging with
the MACD. This
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it may be just a pullback and the most likely support
stands at the 1890 level where we can find a previous swing low point and the
38.2% Fibonacci retracement level. This is where we should see the buyers
piling in with a defined risk below the zone and target a breakout of the 1920
resistance. The sellers, on the other hand, should pile in even more if the
price breaks below the 1890 level and target the 1820 support.

Upcoming
Events

This week has lots of economic data releases beginning
with the US ISM Manufacturing PMI today, the US Jobless Claims and ISM Services
PMI on Thursday and finally the main event of the week: the US NFP report.