FUNDAMENTAL
OVERVIEW
Similar to Bitcoin,
Ethereum had a volatile end to last week. On Thursday, the price spiked to the
upside after some dovish Fed’s Waller comments indicated that he would be willing to keep interest
rate unchanged at the September meeting barring hot CPI data.
Since he deviated
from his usual hawkish stance, it triggered a dovish repricing in interest rate
expectations which lowered the probabilities for a September rate hike and gave
Ethereum a boost.
On Friday, most of
the Waller-driven gains were erased after the US NFPsurprised to the upside showing job growth in August almost tripling
the consensus estimate of 56K. This triggered a hawkish repricing which saw the
probabilities for a rate hike in September returning to pre-Waller levels.
This week, all eyes will be on the US CPI report
data. Unless, we get some surprising breakthrough in US-Iran relations, the
price action will likely remain mostly rangebound or a bit negative as traders
at some point might start hedging into the CPI release.
A soft or in-line CPI will likely give Ethereum
a boost as Fed’s Waller mentioned that he won’t consider a rate
hike unless we get a hot CPI. Conversely, an upside
surprise in core monthly inflation data will likely trigger another selloff as traders
will position for a rate hike.
ETHEREUM TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Ethereum is still stuck in a tight range between the 2,360 support and
the 2,560 resistance. If the price breaks to the downside, we can expect the
sellers to pile in to target a drop into the major trendline around the 2,100
level. The buyers, on the other hand, will want to see the price breaking
higher to increase the bullish bets into the 3,400 level next.
ETHEREUM TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see more clearly the rangebound price action. I also marked the four major
catalysts that kept Ethereum volatile in the past few weeks. As we wait for the
US CPI release, the market participants will likely continue to play the range
by buying at support and selling at resistance until we get a breakout on
either side.
ETHEREUM TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we add here as a breakout of the range would be more important than
the choppy price action inside it. Moreover, the two main themes at the moment
are the US-Iran war and the volatility in Fed rate hike expectations.
Therefore, traders would be better off waiting for the US CPI, some surprising
breakthrough in US-Iran relations or a technical breakout for the next major
move.
UPCOMING CATALYSTS
Tomorrow, we get the
US PPI report and the US Jobless Claims figures. On Friday, we conclude the
week with the US CPI report.
This article was written by Giuseppe Dellamotta at investinglive.com.