Ethereum Reclaims Key Tech Levels

  • ETHUSD
    (${instrument.percentChange}%)

ETH/USD Analysis

The pace of job creation in the United States continued its deceleration in December, with the addition of 223,000 payrolls and average hourly earnings eased to 4.6% y/y, from 4.8% previously, as Friday's data showed. Furthermore, the services sector contracted for the first time in more than two years, while factory orders declined by the most in a similar period of time.

These economic releases renewed market hopes that the Fed will not hike by as much as it December projections imply. CME's FedWatch Tools assigns the highest probability to rates peaking at 5.0% and also sees rate cuts in the second half of 2023. [1]

This optimism for a Fed pivot filters through to this week and works against the greenback, allowing ETH/USD to return above the key 38.2% Fibonacci of the of the November high/low decline. This puts the upper border of the daily Ichimoku Cloud in its crosshair (at around 1,370), but the upside looks unhospitable and 1,445 like a toll order.

Fed officials however are quite hawkish, expecting a higher median terminal 5.1% [2], while the accounts of the last policy meeting revealed that "no participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023". [3]

Moreover, ETH/USD had rejected the key 38.2% Fibonacci level last month and the relative Strength Index has reached the most overbought levels in two years. As such we can see renewed pressure and a move back below the EMA200 (1,245), although it may be early for sustained weakness below the December lows (1,148).

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Nikos Tzabouras

Senior Market Specialist

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 09 Jan 2023 https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

2

Retrieved 09 Jan 2023 https://www.federalreserve.gov/monetarypolicy/fomcpresconf20211215.htm

3

Retrieved 03 Feb 2023 https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20221214.pdf

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