The Russell 2000 couldn’t hold into the last Friday gains as the price erased some of it pulling back into a key support. The first part of the week didn’t offer any meaningful catalysts as the economic calendar was pretty bare this week. The things should change today though as we will see the latest US Jobless Claims data and given the recent weakness in the labour market data, the market is likely to react strongly to this report.
Russell 2000 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Russell 2000 eventually pulled back into the blue 8 moving average from the overstretched levels. The price is now back to the resistance turned support and that’s where we are likely to see the buyers stepping in with a defined risk below the support to position for a rally into the trendline and aiming for a breakout.
Russell 2000 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that there’s also the 38.2% Fibonacci retracement level for confluence. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and increase the bearish bets into the previous lows targeting a break lower.
Russell 2000 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the short-term trend on this timeframe is downwards as the price has been printing lower lows and lower highs. The sellers are likely to lean on the minor counter-trendline to further increase the bearish bets into the lows. The buyers, on the other hand, will want to see the price breaking higher to pile in even more and target the major trendline.
Upcoming Events
Today we have the US Jobless Claims on the agenda, while tomorrow it will be the time for the University of Michigan Consumer Sentiment report. The market is likely to focus on the US Jobless Claims given the recent weakness in the labour market data. Weak figures are likely to weigh on sentiment and push the Russell 2000 lower, while good readings might be enough for the market to rally.
