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
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
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
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.
Upcoming Events
Today we get the latest US Jobless Claims figures, while tomorrow we conclude the week with the US NFP report.
