(Filip L. – FXStreet)
– Cardano price jumps over 2% in a slight recovery during the European session.
– ADA is unable to break back above the key pivot level.
– Expect Powell to come out with more hawkish rhetoric as markets were too eager and cheerful in January.
Cardano (ADA) traders need to face reality as markets are pivoting back toward a sticky inflation story, which contradicts the Goldilocks story that was the driving force in January. Confirmation came overnight with the Australian Central Bank (RBA) offering up a surprise hike of 25 basis points and guiding markets that more hikes are coming. Traders should brace for a possible halt or even hike of global inflation as the main driver in the decline of inflation, energy prices is starting to stabilize.
Cardano price will be profitable in either direction for traders who watch inflation
Cardano price has had a fun rally for January 2023, hitting nearly $0.421. Since the beginning of February, the trend has taken a step back as the central bank came out with the same message that inflation is still too high, and it looks like more troubling news is coming in the coming weeks. Crude oil prices are jumping from $73 back to $76 and look to have hit a floor in the process.
ADA has bounced back a little bit but is being capped by the floor that was held on February 1 This is the 200-day Simple Moving Average (SMA) near $0.393. With Fed chair Jerome Powell set to take the stage later this evening at 16:00 GMT, it is difficult to believe that he would suddenly shift his course and come out dovish. Expect him to stay the course and keep channeling to the markets that more hikes will come depending on the data, ADA could be seen tanking toward $0.324 as reality kicks in.
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Should Powell’s speech be a game changer, expect a sharp jump higher, piercing through $0.388 and possibly testing $0.400. This will open the room for putting that price target of $0.421 back on the radar and bearing 9% gains. Any further upside will depend on further tail risks deflating in the coming days and weeks.
Read BNB/USD (Binance) Elliott Wave analysis – Turn the higher taking place
