Yesterday, the Russell 2000 finished the day positive as the market continues to trade into the CPI release today probably expecting good inflation figures. This raises the risk of a bigger selloff in case the data surprises to the upside given that we should also see Treasury yields rising and the aggressive rate cuts expectations getting trimmed. At the same time, we will see the latest Jobless Claims figures and that will also be something to factor in as strong numbers might double down on a hot CPI report. The best-case scenario for the Russell 2000 is probably benign inflation data and not too weak Jobless Claims.
Russell 2000 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Russell 2000 broke below the trendline that was defining the uptrend since last November and started to consolidate around the 1970 level. There’s not much to do here as the price is trading right between two key zones, so the sellers will want to short from the 2020 resistance while the buyers will want to go long around the 1920 support.
Russell 2000 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have the 38.2% Fibonacci retracement level acting as resistance with the red 21 moving average for confluence. This is where we can expect the sellers to pile in to position for a drop into the 1920 support. The buyers, on the other hand, will want to see the price breaking higher to position for new highs.
Russell 2000 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the current price action with the key levels marked on the chart. Now it’s just about waiting for the key economic releases. Watch also the futures chart as the market will open one hour after the CPI and Jobless Claims data.
