Fundamental Overview
Yesterday, we got some more positive US data releases as the US retail sales came out a touch better than expected and the industrial production data beat forecasts erasing the hurricane related weakness in July.
Despite that, the market is still pricing a 63% probability for a 50 bps cut at today’s decision. What’s more important is that the Fed is cutting into a resilient economy which should lead to better growth expectations and support the stock market.
Russell 2000 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Russell 2000 eventually rallied back above the major trendline and extended the gains into the previous high around the 2250 level. The next target for the buyers should be the 2300 level where we can expect the sellers to step in to position for a drop back into the trendline.
Russell 2000 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we had a very strong rally from the lows as the market looks forward to the Fed rate cuts and the pickup in economic activity. From a risk management perspective, the buyers will have a better risk to reward setup around the 2185 support zone. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop into the 2120 level.
Russell 2000 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have upward minor trendline defining the current bullish momentum. The buyers will likely keep on leaning on it to position for new highs, while the sellers will want to see the price breaking lower to position for a drop into the 2185 support. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the FOMC rate decision, while tomorrow we get the latest US jobless claims figures.
