On the daily chart below, we can see that the price action is compressed between the 50% Fibonacci retracement level and the trendline. Although the moving averages have crossed to the upside and may be an early signal of a change in trend, one should be cautious interpreting it as such because the market is in a range.

The latest economic data are not bullish for the market as US Retail Sales missed across the board the last week and Jobless Claims showed an increase again yesterday. Today we will also see the US PMIs and this data may lead to a breakout.

Russell 2000 Technical analysis

On the 4 hour chart below, we can see that this compressing price action has formed an ascending triangle pattern. The price can break on either side, but once it does it should lead to a sustained trend afterwards. Right now, the price is threatening a break below the trendline, which would confirm the bearish sentiment created by the economic releases.

The sellers are likely to pile in once the price breaks the trendline with conviction and target the support at 1731. The buyers, on the other hand, will want to see the price to break above the 50% Fibonacci level before jumping onboard and push the price to new highs.

On the 1 hour chart, we can see that we also have a range between the support at 1780 and resistance at 1820. So, more conservative sellers will want to see not only a trendline breakout but also the price breaking below the support to avoid a fakeout. The US PMIs today may give the direction with a beat likely to cause the market to rally and a miss to selloff.