Russell 2000 Technical Analysis | Forexlive

The Russell 2000 last week jumped following the
miss in the US CPI report
and bounced on a support zone after a small pullback. The market doesn’t expect
the Fed to hike anymore and it’s pricing in the
first rate cut in May 2024. At the moment, it looks like the market is still
trading based on inflation and interest rate expectations, but the softening in
the labour market as seen with the last NFP and Jobless Claims last
week, is gathering pace and it’s something to keep a close eye on.

Russell 2000 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Russell
2000 pulled back a bit from the key resistance around
the 1820 level. The rally was indeed overstretched as depicted by the distance
from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move. If we get a deeper pullback, the buyers
will likely lean on the black upward trendline to
position for another rally.

Russell 2000 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price
bounced on the support zone around the 1770 level where we had the confluence with the
38.2% Fibonacci retracement level
and the blue 8 moving average. We can also notice that in case the price
continues lower and breaks the support, the buyers will have another
opportunity at the trendline where there’s also the 61.8% Fibonacci retracement
level for confluence.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent bounce on the 1770 support. From a risk management
perspective, late buyers can now only wait for a break above the key 1820
resistance zone to pile in and join the rally. The sellers, on the other hand,
are likely to lean again on the key resistance to position for a drop into new
lows. The sellers should also pile in at every break lower as the buyers will
likely fold pretty fast.

Upcoming
Events

This week is pretty empty on the data front with the US
on holiday for Thanksgiving Day in the final part of the week. Tomorrow, we
have the FOMC Meeting Minutes but it’s unlikely to be market moving given that
it’s three-weeks old data. On Wednesday, we have the US Jobless Claims report
which is probably going to be the most important release of the week. Finally,
on Friday, we conclude the week with the latest US PMIs.