Fundamental Overview
The Russell 2000 has been keeping the bid since last week as the softer than expected US inflation data gave the market a boost.
We haven’t got any key economic report since then and no comment from Fed speakers given that they are in the blackout period.
The main driver of the price action this week has been Trump and his tariffs threats. We saw a quick dip on Tuesday as he talked about imposing 25% tariffs on Canada and Mexico next week, but the market eventually erased the losses.
Overall, it seems like the market is optimistic about tariffs and the news that
Trump is considering a 10% tariff on China might be a signal that he won’t be as aggressive as promised during his campaign given that back then he talked about 60% tariff on China.
Russell 2000 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Russell 2000 broke above the key 2300
resistance. This is where the buyers will likely pile in with a defined risk below the 2300 level to position for a rally into the all-time highs. The sellers, on the other hand, will want to see the price falling back below the level to target the 2200 level next.
Russell 2000 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we now have an upward
trendline defining the bullish momentum. If we get a pullback into it, the buyers will likely step in around the trendline to position for new highs with a defined risk below the trendline. The sellers, on the other hand, will look for a break lower to increase the conviction for a drop back into the lows.
Russell 2000 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as the buyers will look for a bounce around the 2300 level, while the sellers will look for a break lower to target the 2200 level next. The red lines define the
average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures, while tomorrow we conclude the week with the US Flash PMIs.
This article was written by Giuseppe Dellamotta at
www.forexlive.com.
