(Filip L. – FXStreet)
– Ethereum price action has seen a bullish push over the weekend.
– ETH price action is set to jump further if it can bounce off the red descending trend line.
– Traders will need to keep tight trade management as one hiccup could easily see the whole rally reversed in hours.
Ethereum (ETH) price action is set to jump between 7% on the low side and 28% by a more generous calculation, according to price targets established for the end of the week. As the dust settles over recent events, traders are reassessing the situation and it is becoming clear two key factors are dictating the future path of trading. The first is company earnings this week and the second, how the UK political situation unfolds. These will determine how far ETH price action could rally.
ETH price action will need careful trade management
Ethereum price action is set to rally substantially this week with, at first sight, a profit of 7% to 28% on the table. Over the weekend it became clear EU earnings compared negatively to US earnings, with the former talking about restructurings and job cuts, while in the US, there were only very small indications of this. This could mean that a deep recession is set to hit the EU economy and, for now, avoid the US.
ETH price action will, last but not least, react to whether Rishi Sunak can calm UK politics and attendant market woes. If he can finally get a grip on the situation, expect Ethereum price action to quickly rally towards the 55-day Simple Moving Average (SMA) at $1,400.00. Once broken above, expect a strong rally towards and into the weekend, with $1,688 set to be tested and traders booking profit around the monthly R1 resistance level.
This article mentions a solid trading plan and trade management are needed due to the weakness of the recovery. The risk is, one negative catalyst could easily blow traders out of the markets and cause them heavy losses on their longs. Hence the only sensible entry point for prospective longs would be on a bounce off the red descending trend line. For if it breaks down again, ETH price action is likely to trade near $1,200 again and could even start to accelerate its losses.