Russell 2000 Technical Analysis | Forexlive

The US CPI yesterday missed expectations across the board
increasing the chances of a soft landing and decreasing the probabilities of more
than one hike from the Fed. In fact, the market now expects one final hike at
the July FOMC meeting. Some Fed members spoke after the CPI release but didn’t
hint to another skip or a pause citing upside risks from the tight labour
market. All else being equal, we can expect more higher highs going forward
barring ugly data on the growth side.

Russell 2000 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that after the miss
in the US CPI we finally got the break above the 1920 resistance zone.
The target should now be the next resistance at 2030 where we should find
strong sellers.

Russell 2000 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that there’s no
clear resistance in sight until the 2030 level. If we get a pullback, the resistance turned support at 1920
should see the buyers piling in with a defined risk below the zone to target
the 2030 level. The sellers, on the other hand, will want to see the price
breaking below the 1920 support zone to start piling in and extend the fall
into the 1820 support.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the support zone at 1920 where we have the confluence with the black trendline and
the 38.2% Fibonacci
retracement level. If the momentum is strong enough and
we don’t get ugly US jobless claims today, we should see the Russell 2000
breaking above the 1965 high and rally towards the 2030 resistance.

Upcoming
Events

Today we have the US Jobless Claims on the agenda.
We should see more upside in case the data beats expectations and a pullback if
the data misses. Tomorrow, the University of Michigan Consumer Sentiment report
will wrap up the week.