Ethereum Exposed at Key Tech Levels, after Last Week’s Slump

  • ETHUSD
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ETH/USD Analysis

Overall sentiment was cautious last week, as markets focused on prospects of tighter monetary policy by the US Federal Reserve, due to commentary by a series of voter that supported the higher-for-longer narrative and mostly strong economic data. Mr Harker for instance, spoke of "some additional tightening" to get to a restrictive policy and "hold rates in place" once this is reached. [1]

Friday's preliminary data showed that factory activity expanded after several months of contraction, as Manufacturing PMI printed 50.4, while the services sector also strengthened. Meanwhile core inflation remains sticky, despite deceleration in the all-inclusive measures. Markets are waiting for another inflation update at the end of this week, in the form of the Personal Consumption Expenditures (PCE).

The above factors supported the greenback and ETH/USD shed around 8% last week, now testing critical tech levels, provided by the EMA200 and the 38.2% Fibonacci of the last leg up (March lows/April highs). This puts it in a precarious position for further losses towards the broader 1,600-1,500 region, but a strong catalyst would be needed for a test.

On the other hand, last week started with 2023 high, the Relative Strength Index hovers around oversold territory and ETH/USD tries to find support at the aforementioned critical region. As long as it can defend it, the correction is limited and the popular altcoin has the ability to post fresh highs (2,136), although it does not inspire confidence yet for taking out 2,443-75.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 24 May 2024 https://www.philadelphiafed.org/the-economy/monetary-policy/230420-understanding-monetary-policy-through-the-housing-channel

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