Russell 2000 Technical Analysis | Forexlive

The Russell 2000 ended last week on a positive note
as we got a strong rally despite some concerning data. The University of Michigan consumer
sentiment report missed forecasts across the board by a big margin once again.
The bearish signs keep on accumulating with the recent hawkish tone from Fed
speakers and the softening labour market data with the big misses in the recent
NFP report
and the rising Continuing Claims. The
buyers should be very careful going forward.

Russell 2000 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Russell
2000 couldn’t bounce on the key support zone
around the 1720 level and fell right through it. The sellers should gain more
conviction now and possibly fade the last week’s rally targeting a drop back
into the lows.

Russell 2000 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we had also
the 38.2% Fibonacci retracement level
for confluence around
the support. The buyers leant on the red 21 moving average to
position for a rally back into the trendline, but
they will need the price to break above the support turned resistance to
invalidate the bearish bias.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
sellers are likely to pile in at the resistance level as they have also the
confluence with the red 21 moving average and the 61.8% Fibonacci retracement
level. The buyers, on the other hand, will want to see the price breaking
higher to increase the bullish bets into the trendline and target a breakout.

Upcoming
Events

This week we have some top tier economic releases. We
begin tomorrow with the US CPI report which is going to be one of the most
important events of the week. On Wednesday, we have the US Retail Sales and PPI
data, while on Thursday we conclude with the latest US Jobless Claims figures.