Russell 2000 Technical Analysis | Forexlive

Last week, the Russell 2000 surged to new highs
following the surprisingly dovish FOMC decision where
the Fed increased the rate cuts expected in 2024 to three and Fed Chair Powell
delivered some dovish comments. In the last part of the week, we got a slate of
soft-landing data as the US Jobless Claims and Retail Sales beat
expectations, while the US PMIs missed on the manufacturing side and beat on
the services one.

Russell 2000 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Russell
2000 reached the key resistance zone
around the 2020 level. This is where we can expect the sellers to step in with
a defined risk above the resistance to position for a drop back into the bottom
of the range at 1645. The buyers, on the other hand, may want to wait for a
pullback into the broken resistance now turned support around
the 1920 level before increasing the long positions.

Russell 2000 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have some
strong confluence around
the 1920 support as we can find the trendline, the
61.8% Fibonacci retracement level
and the red 21 moving average. That’s
where the buyers may want to lean onto to have a better risk to reward trade.
Alternatively, they may want to split their position in half as the price might
break below the first trendline and bounce on the second one.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the current price action with the Russell 2000 consolidating right
below the key resistance zone. To recap, the sellers should step in around this
resistance to position for a drop all the way back to the 1645 support and
increase the bearish bets at every break lower. The buyers, on the other hand,
could already pile in at a break above the 2020 resistance, but from a risk
management perspective, they will have better risk to reward setups around the
trendlines.

Upcoming
Events

This week is a bit empty on the data front as we head
into the Christmas holidays. On Wednesday, we have the US Consumer Confidence
report. On Thursday, we get the latest US Jobless Claims data, while on Friday
we conclude the week with the US PCE report.