On the daily chart below, we can see that the buyers struggled to break above the 50% Fibonacci retracement level and the market went into a range. As the price broke below the trendline the momentum started to switch in favour of the sellers and eventually they piled in aggressively once the First Republic Bank reported a 40% fall in deposits reigniting fears around the banking sector.

The price is now near the strong support at 1731 and we may likely see a bounce from there without further negative news.

Russell 2000 Technical Analysis Technical Analysis In financial trading, technical analysis refers to the method of studying the previous history and price movements of an instrument, such as foreign exchange, stocks, commodities, etc.Key determinants include an asset’s historical price action, chart patterns, volume, and other mathematical based visual tools, in order to predict future movements of that instrument. Traders who utilize various means of technical analysis are known by a variety of terms, such as technical traders, technical analy In financial trading, technical analysis refers to the method of studying the previous history and price movements of an instrument, such as foreign exchange, stocks, commodities, etc.Key determinants include an asset’s historical price action, chart patterns, volume, and other mathematical based visual tools, in order to predict future movements of that instrument. Traders who utilize various means of technical analysis are known by a variety of terms, such as technical traders, technical analy Read this Term

On the 4 hour chart below, we can see that the 50% Fibonacci retracement level and the trendline formed an ascending triangle pattern. Generally, when the price breaks on either side we can see a strong move afterwards, which is in fact what we got. The next things to watch for the market is the US economic data with the Jobless Claims and GDP reports scheduled for today.

On the 1 hour chart, we can see that the break of the trendline was not really enough to cause a selloff as the market was also stuck in a range. Once the price broke out of the range, it was a one-way street to the downside. The price is now bouncing from the support as the bearish momentum has weakened as we can see from the divergence with the MACD.

The price is most likely to pull back towards the 1755 swing level where the sellers should be waiting to enter again the market. A break above the 1755 level should open the door for a bigger correction towards the support turned resistance of the previous range.