Russell 2000 Technical Analysis | Forexlive
On the daily chart below, we can
see that the price has breached the strong support level at 1920 and started to
range just beneath it. The break of the support came as the S&P Global US
PMIs came in strong basically confirming the pick up in economic activity and
inflationary pressures.
The moving
averages are clearly crossed to the downside signalling a change in the trend.
If the sellers take full control and buyers fold, we can see the price reaching
the 1720 level pretty fast. Yesterday the market got again some bad news from
the ISM
Manufacturing PMI as the “prices paid” sub-index jumped back into
expansion. The market is now worried that the Fed will need to be more hawkish
and the prospects of a soft-landing fade by the day.
In the 4
hour chart below, we can see that after the market breached the 1920 support,
the price pulled back to the broken support now turned resistance and started to range. The 1920
is a key level where we can also find the trendline acting as resistance and the Fibonacci
retracement levels.
The
buyers will need a firm break of that resistance to gather some conviction and
targeting higher highs. The sellers for now are in control and a break of the
low at 1874 should lead to more selling pressure.
In the 1 hour chart, we can see
that at the moment the best strategy is to wait for another catalyst which can
be the ISM Non-Manufacturing PMI tomorrow or to wait for a
breakout on either side. The bias is clearly bearish as economic data keeps
coming hot and the market is repricing a more hawkish Fed.