Russell 2000 Technical Analysis – Watch what happens at this key support

<p>Last Friday, the market sold off as the <a href="https://www.forexlive.com/news/us-october-prelim-umich-consumer-sentiment-630-vs-672-expected-20231013/">University of Michigan Consumer
Sentiment</a> report saw a big miss across the board with the inflation expectations
figures spiking back up. This might be a signal that the consumers are indeed
weakening, and it could be a bad omen for the broad market. Moreover, we got
some defensive positioning into the weekend as there were some expectations
that Israel could start a ground offensive in Gaza and that could have led Iran
to join Hamas with uglier scenarios becoming likely from that point onwards. </p><p>The actual events fell short of expectations as we haven’t
got a ground operation and, although we got mixed signals, it seems like <a href="https://www.forexlive.com/news/irans-un-mission-reportedly-says-its-armed-forces-will-not-engage-israel-if-not-attacked-20231015/">Iran is not intentioned to join
this war</a> “provided that Israel does not dare to attack Iran”. This could lead to
a relief rally and the technical levels can help in identifying the likely
entry and exit points. </p><p>Russell 2000
Technical Analysis – Daily Timeframe</p><p>On the daily chart, we can see that the Russell
2000 got rejected from the red 21 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a> and fell
all the way back to the key <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">support</a> zone
around the 1720 level. This is where we can expect the buyers to step in with a
defined risk below the zone to position for a rally into the <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> around
the 1800 level. </p><p>Russell 2000 Technical
Analysis – 4 hour Timeframe</p><p>On the 4 hour chart, we can see that the breakout
of the minor trendline resulted in a fakeout and, as soon as the price fell
back below the trendline, the sellers piled in more aggressively to extend the
drop into the support zone. Although we will likely see a bounce here, the
sellers will want to see the price breaking below the support zone to start
positioning for a drop into the cycle lows around the 1650 level. </p><p>Russell 2000 Technical
Analysis – 1 hour Timeframe</p><p>On the 1 hour chart, we can see more
closely the key zone around the 1720 level. The sellers are likely to lean on
the minor trendline with a tight risk above it to target a break below the
support zone with a better risk to reward setup. The buyers, on the other hand,
will want to see the price breaking higher to increase the bullish bets into
the 1820 resistance. </p><p>Upcoming
Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> is a bit empty on the data front. Tomorrow we
will get the US Retail Sales data and it will be interesting to see if the
worse consumers’ sentiment translated into weaker spending. On Thursday, we
will see another US Jobless Claims report where the market will want to see if
the miss in Continuing Claims last week was just a blip or something is
starting to deteriorate in the labour market. On the same day we will also hear
from Fed Chair Powell with the market being attentive to any type of signal on
the upcoming rate decision. </p>

This article was written by FL Contributors at www.forexlive.com.