With no major catalysts expected ahead for currencies, we’re turning to the crypto market for some potential short-term action. Will we see a short-term dip ahead on ETH/USD and will buyers be ready and waiting at better prices?
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at the downtrend in GBP/USD ahead of U.S. jobs data, so be sure to check that out to see if there is still a potential play!
Intermarket Update:
Equity Markets Bond Yields Commodities & Crypto
DAX: 14973.33 -1.46%
FTSE: 6995.87 -1.15%
S&P 500: 4363.55 +0.41%
NASDAQ: 14501.91 +0.47% US 10-YR: 1.526% -0.005
Bund 10-YR: -0.179% +0.002
UK 10-YR: 1.072% -0.001
JPN 10-YR: 0.076% +0.02 Oil: 77.00 -2.45%
Gold: 1,764.80 +0.22%
Bitcoin: $55,166.75 +7.77%
Ether: $3,590.30 +2.85%
Fresh Market Headlines & Economic Data:
Dow closes up 100 points on possible debt ceiling deal progress, recovering 450-point loss
U.S. Senate delays debt limit vote as Democrats mull McConnell offer
Subsiding COVID-19 infections boost U.S. private payrolls in September
IMF sees inflation subsiding in 2022, supply risks may keep it elevated
Bitcoin soars to five-month high on seasonal factors, Soros news
Energy price surge sends shivers through markets as Europe looks to Russia
German factory orders register sharp decline in August
U.K. inflation expectations at 13-year high lift rate-hike bets
Upcoming Potential Catalysts on the Economic Calendar
Australia Services Index at 9:30 pm GMT
Bank of Japan Governor Kuroda speech at 1:00 am GMT (Oct. 7)
Japan Leading Economic Index at 5:00 am GMT (Oct. 7)
Germany Industrial Production at 6:00 am GMT (Oct. 7)
U.K. Halifax House Price Index at 6:00 am GMT (Oct. 7)
France Trade Balance at 6:45 am GMT (Oct. 7)
Italy Retail Sales at 8:00 am GMT (Oct. 7)
ECB Monetary Policy Meeting Accounts at 11:30 am GMT (Oct. 7)
If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.
What to Watch: ETH/USD
While we do see a steady flow of events in the forex economic calendar above coming in the Asia and London sessions, odds are that we’re not going to get a significant catalysts from any of them to make forex a top priority in today’s session. So we turn our attention to the crypto space, which almost never disappoints in the volatility category, and for today, we’ll check out the Ether, the king of all smart contract tokens.
On the one hour chart above, we can see ETH bulls solidly in control since the end of September, especially in today’s session where we saw ETH/USD jump 8% from the $3350.00 area to $3630.00 before topping out. It’s likely that ETH (and the rest of the crypto space) rode bitcoin’s coat tails higher on recent statements from U.S. officials that the U.S. does not have plans to ban cryptocurrencies at this time.
There’s also speculation that a BTC ETF will be coming out soon, which would likely draw in massive capital from those interested in the space, but not really comfortable with using a crypto exchange or a hardware wallet.
But at the moment, 3600.00 looks like the short-term top, and with stochastic signaling potentially overbought conditions, there’s a chance we could see some profit taking after a brisk move to the upside.
In that scenario, technical traders will likely look for a buy-the-dip opportunity to play the current trend higher, and with a daily average true range of around $250, buyers may start to show up around $3500.00 down to the Wednesday lows around $3360.00. If the market gets there and we do see bullish reversal patterns, that may draw in buyers, both short-term and medium term in nature.
If that behavior plays out, look for ETH/USD to make a go for the $4,000.00 – $4,400.00area, where we’d likely see some profit taking as it has been a major resistance area.
