Ethereum trims losses as geopolitical fears ease and traders turn their focus to US CPI report

<p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">FUNDAMENTAL OVERVIEW</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;"> </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">Ethereum's recent price action has been driven mainly by macro and geopolitical developments, particularly movements in US Treasury yields, the US dollar and overall risk sentiment. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">US-Iran escalation risks triggered a broad crypto market selloff but some of the losses were eventually pared back after Trump ruled out strikes on Iran before the November elections. The two sides are still engaged in negotiations to reopen the Strait of Hormuz. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">Looking ahead, falling Treasury yields and a weaker dollar could support prices in the short term but those moves will need to have a fundamental backing. Therefore, the focus will remain on US-Iran developments and the US CPI report due on Wednesday. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">A breakthrough in negotiations would support Ethereum on easing inflation and rate hike concerns, while a renewed escalation would likely trigger another selloff. On the US CPI front, a higher than expected core reading could put a rate hike in October back on the table and weigh on the crypto market. A soft report, on the other hand, will likely give Ether a boost on falling Treasury yields and US dollar.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;"> </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">ETHEREUM TECHNICAL ANALYSIS – DAILY TIMEFRAME</p><p></p><p>On the daily chart, we can see that <a href="https://www.tradingview.com/symbols/ETHUSD/" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">Ethereum</a>broke below the major upward trendline and extended the losses as the sellers piled in to target a drop into the next major trendline. If the price gets there, we can expect the buyers to step in, with a defined risk below the trendline, to position for a rally into the 3,400 level. The sellers, on the other hand, will look for a break below the trendline to increase the bearish bets into the 1,900 level next.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">ETHEREUM TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME</p><p></p><p>On the 4 hour chart, we have a resistance zone around the 2,630 level where we can also find a downward trendline for confluence. If the price gets there, we can expect the sellers to step in, with a defined risk above the resistance, to position for a drop into the major upward trendline. The buyers, on the other hand, will look for a break higher to increase the bullish bets into the 3,400 level next, with the 3,000 level as the first target.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">ETHEREUM TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME</p><p></p><p>On the 1 hour chart, we have a minor upward trendline defining the current pullback. The buyers will likely lean on the trendline, with a defined risk below it, to keep pushing into the 2,630 resistance. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop into the major upward trendline. The red lines define the <a href="https://investinglive.com/Education/trading-tip-know-the-average-daily-range-adr-20220207/" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">average daily range</a> for today.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">UPCOMING CATALYSTS</p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 103%; font-size: 15px;"><a href="https://investinglive.com/EconomicCalendar" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">On Wednesday</a> we have the US CPI report. On Thursday, we get the US PPI, the US Retail Sales and the latest US Jobless Claims figures.</p> This article was written by Giuseppe Dellamotta at investinglive.com.