The market has managed to rally towards the strong resistance at 2030 price level. This may be a make-or-break moment for the bulls. The Fed has hiked by 25 bps as expected and signaled “a couple more rate hikes” to come.

Fed Chair Powell sounded hawkish as expected but didn’t push back that much against the easing in financial conditions like the market expected him to do. This helped the bulls to continue pushing higher as the Fed gets near the pause in their tightening cycle and the labour market still shows resilience.

Today’s going to be an important day for the market as we get two key economic reports: the NFP and the ISM Services PMI. Given that the market is expecting a “soft landing” scenario as inflation moderates and the labour market remains strong, a miss in today’s report may trigger a risk off wave.

RUSSELL 2000 Technical Analysis

In the daily chart above, we can see that the price after breaking out of the 1920 resistance, has rallied towards the next resistance at 2030. The bulls had an extraordinarily run since the start of the year even in the face of weaker leading economic indicators. The big levels are now the resistance at 2030 for the bulls and the support at 1920 for the bears. It’s likely that a breakout from any of those will see major moves.

In the 4 hour chart above, we can see that the price is now near the 2030 resistance. There’s an upward trendline defining the current bullish trend. Looking forward besides being near the pause in the Fed tightening cycle, we may see much weaker economic data and it’s probably going to be hard for the market to ignore a weakening labour market. For now, the market is going with the flow.

Zooming in to the 1 hour chart, we can see another short term upward trendline defining the current bullish momentum. This trendline should act as support for the bulls if they want to break above the 2030 resistance. In case of a break down lower, the next support will be the trendline and support at 1920.