Market Spotlight: ETH Approaching Key Zone

market-spotlight:-eth-approaching-key-zone

Keep An Eye On ETHThe breakdown in the US Dollar this week is allowing for a broad move higher in risk assets. Among those instruments seeing the most benefit is ETH which has rallied almost 20% off the lows. The brief dip below the falling wedge pattern suggests a false breakout, with potential now for a fuller reversal higher. However, the key area to watch is the 3707.5 level. This was a major ledge of support which, now broken, hangs overhead as resistance. Until this level is broken, the focus remains on further downside with a retest of this area worth monitoring for reversal patterns to set fresh shorts. On the flipside, a break of that area (and the top of the falling wedge pattern) suggests a shift in sentiment, creating room for a breakout trade targeting 4149 initially.Keep An Eye OnUSD flows and risk flows will be the key aspects to monitor this week for ETH. If the Dollar continues to trade lower and risk assets continue to benefit this should pave the way for ETH to continue higher near term. Alternatively, any shift higher in USD is likely to curtail this current rally. With this in mind, traders need to watch today’s US PPI release and Friday’s retail sales release for potential USD volatility.

Source: Tickmill

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