Cryptocurrencies are generally having an upbeat month, reacting from the rout and the collapse of the second quarter, with FXCM's CryptoMajor Basket gaining around 25% at the time of writing. ETH/USD is outperforming the basket, since it rises by approximately 40% on the month, coming from a strong weekly performance.
The recent advance however, was contained by key technical levels and the popular altcoin slides over the last few days. In particular, it rejected the 23.6% Fibonacci of the Q2 High/Low drop and the lower border of the daily Ichimoku cloud, now testing the EMA200 on the downside.
This creates risk for a return back below mid-1,200 that would bring parity back into play. Bears had breached this level last month, for the first time in one and a half years, but it is probably early to talk about another test at this point.
ETH/USD is trying to defend the EMA200 above which it maintains the near-term upwards bias after the recent relief rally and the ability to take another crack 1,606-66. A break above this area has the potential to accelerate such moves towards the 38.2% Fibonacci (1,984), although we are cautious around such outcome, while 2,289 is distant.
The recent cool down in expectations around the Fed's next hike had led to pullback in the US Dollar, which Ethereum was able to take advantage of. The next leg of the move will likely be determined by Wednesday's decision and the forward guidance for September.
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.