Friday , 22 November 2024
Home Forex Russell 2000 Technical Analysis – Good jobless claims quell the fears
Forex

Russell 2000 Technical Analysis – Good jobless claims quell the fears

Fundamental
Overview

The Russell 2000 bounced strongly from the lows yesterday following good US
Jobless Claims
figures as the data quelled some of the fears around the
labour market after the weak US
NFP
report last Friday.

The market pricing for rate
cuts eased a bit but remains quite elevated with a 55% probability of a 50 bps
cut in September and a total of 103 bps of easing by year-end. If the NFP
report was indeed negatively impacted by Hurricane Beryl, which is what has
been transpiring from the data, then we can expect the market to go back to the
old script of resilient growth and positive risk sentiment.

Moreover, the Japanese
markets shouldn’t be a problem anymore given that the Japanese officials made
it pretty clear that they won’t proceed with more tightening given the
volatility in the markets.

Russell 2000
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Russell 2000 bounced on the swing low level at 1994 and extended
the gains to rise back above the major trendline. This might have been just a
fakeout which could turn into a strong bullish signal.

The buyers should start to
pile in above the trendline with a defined risk below it, while the sellers
will look for another drop below the trendline to target the 1994 level and a
break below it.

Russell 2000 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a strong resistance
around the 2100 level where the price got rejected from several times in the
past days. A breakout to the upside should see the buyers gaining more
confidence and increasing the bullish bets into new highs. The sellers, on the
other hand, will likely lean on this resistance with a defined risk above it to
position for a drop back into the 1994 level.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the recent rangebound price action as the market waited for
good news to gain more confidence. We will see in the next days if the market
manages to break to the upside and rally to new highs. The red lines define the
average daily range for today.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

USDCHF Technical Analysis – The USD gets a bid on weak Eurozone PMIs

Fundamental OverviewOverall, we’ve seen a rangebound price action in the US Dollar...

US Dollar surges to two-year high as Eurozone PMIs disappoint

The US Dollar (USD) jumps on Friday to its highest level in...

USD: Moderately hawkish remarks from Williams – ING

Yesterday’s US Dollar (USD) rally led to a break below the key...

Pound Sterling weakens as UK Retail Sales, flash PMI declines

The Pound Sterling (GBP) weakens against a majority of its peers, except...