Russell 2000 Technical Analysis | Forexlive

Yesterday, the Russell 2000 had a negative day as
the US ADP data
missed expectations which might have weighed on the sentiment heading into the
NFP report tomorrow. There might also be a general profit taking ahead of the
NFP data and the FOMC rate decision next week as the market might want some new
strong catalyst to make new highs. In the bigger picture, the market generally
peaks when the labour market weakens, and the unemployment rate starts to rise
steadily, so the bulls should be very careful heading into the 2024.

Russell 2000 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Russell
2000 yesterday started to fall soon after the open as the sentiment might have
deteriorated following the miss in the US ADP data ahead of the NFP tomorrow.
The trend for now remains bullish as the price has been printing higher highs
and higher lows with the moving averages being
crossed to the upside.

The buyers should lean on the trendline where
they will also find the confluence with the
Fibonacci retracement levels,
the key 1820 support zone and
the red 21 moving average. A break lower would invalidate the bullish setup and
switch the bias from bullish to bearish.

Russell 2000 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have
another minor trendline on this timeframe where the buyers could lean onto with
the red 21 moving average adding extra confluence. The buyers might want to
split their order in half as the price could very well break through the minor
trendline and react to the major one. The sellers, on the other hand, are
likely to pile in at every break lower with a break below the major trendline
confirming the change in trend.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
latest leg higher diverged with
the MACD which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, as long as the price stays above the trendlines, we
will be in the pullback zone, but if the price breaks the major trendline, a
reversal would be confirmed, and the sellers will regain control.

Upcoming
Events

Today we get the latest US Jobless Claims figures
where the market will want to see how fast the US labour market is weakening.
Tomorrow, we conclude the week with the US NFP report which is going to be a
big market moving event.