Bottom line: Ethereum long term structure continues to be bullish against 89.50 levels. In the short term though, the crypto might be preparing for a corrective drop towards 152.00/155.00 levels, before turning bullish again.
Fundamental Outlook:
USDCHF has managed to rally by over 100 pips in the last 2 trading sessions touching 0.9467 levels yesterday. The return of a possible risk aversion helped US Dollar gain across major currencies. It might just be the beginning, as the US Dollar Index also managed to rally close to 96.40 mark.
COVID-19 infections continue to rise across the US and Asian Countries (India specifically as it crosses the 1 million mark). The worst affected states in the US, Florida and Texas might be considering partial lock downs from today. Global Equity Markets remain vulnerable for a steep decline going forward.
GBPJPY exchange rate remained flat around 134.60, as GBP failed to gain despite an improvement in the UK job market yesterday. Sterling also declined against the USD amidst rising US-China tensions and potential second wave of COVID-19 infections. The US Dollar might regain its dominance if risk assets sell off.
Technical Analysis:
Ethereum might be preparing to drop towards 152.00/155.00 levels over the next few trading sessions, as bears prepare to complete the corrective drop. After having print above 253.00 resistance earlier, the crypto has been in a corrective phase already.
Ethereum had rallied between 89.50 and 254.00 earlier. Further, resistance was taken out at 253.00 levels to confirm bulls are here to stay for long. Since then, a corrective drop is being worked upon which is expected to terminate around 152.00/155.00 levels going forward.
Also note that the fibonacci 0.618 retracement of the above rally between 89.00 and 254.00 is placed around 153.19. High probability remains for a bullish reversal if prices manage to drop there. Most traders might be preparing to enter buying again around 152.00/155.00 levels, going further.
Prepared by
Harsh Japee, Technical Analyst.
Ethereum Chart
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