Russell 2000 Technical Analysis | Forexlive

Yesterday,
the Russell 2000 finished the day negative as some weak US data started to
weigh a bit on sentiment. The ISM PMIs recently missed expectations with
notably the employment indexes showing contraction. The ADP
yesterday missed forecasts and the Job
Openings were lower than expected with negative revisions to the prior figures.
Moreover, we had Fed Chair
Powell testifying to Congress, but he basically reaffirmed their patient
approach stressing that the timing for rate cuts will be determined by the
incoming data.

Russell 2000 Technical
Analysis – Daily Timeframe

Russell 2000 Daily

On the daily chart, we can see that the Russell
2000 probed above the 2073 high recently but got smacked back down soon after.
This is where the sellers are stepping in expecting the double top to work
out. The buyers, on the other hand, will want to see the price continuing
higher confirming the breakout and invalidating the bearish setup to increase
the bullish bets into new highs.

Russell 2000 Technical
Analysis – 4 hour Timeframe

Russell 2000 4 hour

On the 4 hour chart, we can see that the price has
been trading inside a rising channel. From a risk management perspective, the
buyers will have a much better risk to reward setup around the lower bound of
the channel where they will also find the 61.8% Fibonacci retracement level
for confluence. The
sellers, on the other hand, will want to see the price breaking below the
bottom trendline to
increase the bearish bets into the 1920 support.

Russell 2000 Technical
Analysis – 1 hour Timeframe

Russell 2000 1 hour

On the 1 hour chart, we can see that we
had a divergence with
the MACD right
at the 2073 high. This is generally a sign of weakening momentum often followed
by pullbacks or reversals. In this case, the price broke below the trendline
which could be the confirmation for a reversal with the likely target standing
around the lower bound of the channel. The sellers should keep piling in around
these highs to target the 2020 support, while the buyers will want to see the
price breaking above the recent high to invalidate the bearish setup and
position for new highs.