Russell 2000 Technical Analysis | Forexlive

The Russell 2000 couldn’t break above the key
resistance zone despite a less hawkish Fedspeak and increased rate cuts
expectations. One good reason might be the weakening of US data, especially on
the labour market side, as we have also seen recently in the details of the US Consumer Confidence report.
Historically, the sustained rise in the unemployment rate is bearish for the
stock market.

Russell 2000 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Russell
2000 rejected once again the key resistance around
the 1820 level ending the day with a shooting star candlestick. This is
generally a reversal pattern, and it comes at a strong resistance, which raises
the odds for a move lower. The first target for the sellers should be the
upward trendline around
the 1750 level where the buyers will likely step in with a defined risk below
the trendline to position for another rally into the resistance and aiming for
a breakout.

Russell 2000 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the buyers will have a much better risk to reward setup
at the trendline where we can also find the 50% Fibonacci retracement level
and the daily red 21 moving average for confluence. A break
below the trendline would invalidate the bullish setup and likely trigger a
selloff with the sellers increasing their bearish bets.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have a minor trendline that defined the consolidation below the key resistance.
Some aggressive buyers might lean on this trendline to target a break above the
key resistance. The sellers, on the other hand, will want to see the price
breaking lower to increase their bearish bets into the major trendline.

Upcoming
Events

Today we will get the US PCE and US Jobless Claims
data with the market likely focusing more on the Jobless Claims figures given
that we already saw the latest inflation data with the US CPI report just two
weeks ago. Tomorrow, we conclude the week with the US ISM Manufacturing PMI
which missed expectations by a big margin the last time.