People will be paying close attention to any little bit of a pullback as an opportunity to build a longer-term “buy-and-hold” scenario.

• Ethereum fell a bit on Tuesday as we continue to look at the $2000 level above as a major resistance barrier.
• If the market was to break above the $2000 level, that would obviously be a very bullish sign and could send the Ethereum markets much higher.
• There are a lot of crosscurrents at the moment that continue to throw things around.

Ethereum Technical Analysis

The last couple of candlesticks have been shooting stars, and that does suggest that perhaps we are going to continue to see a little bit of downward pressure. The $1800 level is an area that had previously been the beginning of this resistance barrier that we are in and it’s likely that we would see is a little bit of a reaction. That area should in theory be a bit of a small support level as “market memory” could come into the market. Ultimately, this is a market that I think will continue to be very noisy, and it’s likely that what we see is a situation where buyers could come back in and pick up little bits and pieces of Ethereum, but you should keep in mind that the $1600 level being broken to the downside could send this market lower.

Ethereum does have the distinction of the major upgrade coming, so it’s likely that will continue to keep Ethereum a bit stronger than many other cryptocurrencies around the world. Nonetheless, we have reached a major inflection point and it looks like a short-term pullback is more likely than not going to be the case. The markets will continue to be volatile, so you do need to be cautious about your position size, but more often than not we are going to see traders look at this through the prism of a longer-term standpoint. After all, if Ethereum is going to turn around and show signs of life, it is possible that we will turn things around and see a major breakout. That could take a while, and I think what we have is a situation where people will be paying close attention to any little bit of a pullback as an opportunity to build a longer-term “buy-and-hold” scenario. We are in an area that could be thought of as an accumulation zone.

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This is a market that I think will continue to see a lot of choppy behavior, with the 4200 level above could offering a bit of a barrier.

• The S&P 500 Index drifted a little bit on Tuesday as we are awaiting the CPI numbers on Wednesday.
• The CPI numbers will give us a bit of a hint as to where the Federal Reserve will be looking as far as monetary policy is concerned.
• Keep in mind that the market is likely to see a lot of noisy behavior ahead of this announcement, and then most certainly after it.

Keep an Eye on CPI

The Core CPI is going to be the measurement to watch and is expected to come in at a 0.5% month-over-month reading. If it comes in hotter than that, the S&P 500 will almost certainly get sold into. If we break down below the 4100 level, it’s likely that the market could go down to the 4000 handle. The 50-day EMA is sitting underneath there and could offer support as well, but it’s closer to the 4900 level.

This is a market that I think will continue to see a lot of choppy behavior, with the 4200 level above could offering a bit of a barrier. If we were to somehow break above there, then it’s likely that we could go to the 4300 level. Keep in mind that we are at a major area of noise in the past, and an area where I think a lot of “market memory” could come into the picture. The size of the candle is neither here nor there, but the fact that we pulled back from a shooting star is not a huge surprise. I suppose you could take a look at this through the prism of a “hint”, as we had formed a hammer followed by a shooting star, and then actually had a bit of a body in this negative candlestick. However, if there is enough of a surprise from the announcement, that could cause the volatility to pick up in either direction.

When you look at the chart, you can see that I have attached a blue box where we had action previously, and I think this is what we are struggling with right now due to the “market memory” in that general vicinity. This is a market that continues to see a lot of interest, so it’ll come down to whether or not Wall Street thinks it’s going to get it’s fixed.

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There is no real reason to be a buyer of the S&P 500 at the moment because the entire fundamental outlook for earnings, inflation, and monetary policy all seem to be looking like they are going to work against higher movement to the upside

The S&P 500 futures markets had a bit of limited trading during the Monday session, as it was Juneteenth in the United States. Because of this, you can only read so much into the candle, but it’s probably worth noting that Friday was an attempt to stabilize the markets. The 3700 level is an area that seems to be important in general, as it is a large, round, psychologically significant figure, and an area where we had seen action previously.

However, any rally in this index is more likely than not going to end up being an opportunity to get short yet again. After all, the market is in a downtrend for multiple reasons. The first one of course is the Federal Reserve and its monetary policy, as they are going to get extraordinarily tight and are showing no signs of changing their attitude. Because of this, Wall Street will have to figure out how to swim on its own, something that they have not had to do for the last 14 years.

The 3800 level above is where we have seen lots of pressure previously, and therefore I would pay close attention to any rally in that area that shows signs of failure. Even if we break above there, the 50 Day EMA is racing to lower levels and should offer a significant amount of downward pressure. It is currently at 4050 and drifting much lower. The market is going to continue to see a lot of pressure, and of course risk aversion. Granted, we are oversold and we could get a little bit of a bounce, but that would be something that you would expect after this type of brutal selloff. In this environment, I do believe that it is only a matter of time before exhaustion kicks in, and you can start shorting again. On the other hand, if we were to break down below the bottom of the candlestick from the Friday session, then it’s likely that we simply drop further.

There is no real reason to be a buyer of the S&P 500 at the moment because the entire fundamental outlook for earnings, inflation, and monetary policy all seem to be looking like they are going to work against higher movement to the upside and therefore it’s likely that it’s only a matter of time before we fall apart again.

The US dollar has fallen a bit against the Indian rupee during trading on Thursday but has found a bit of buying just below the ₹76 level. By doing so, the market ended up forming a bit of a hammer which looks quite a bit like a perfect “pull back and retest” of the overall trend. Because of this, if we can break above the top of the candlestick for the Thursday session, it is very likely that the pair will go looking towards the ₹76.50 level.

Market participants continue to see the US dollar as a greater value, as we have been in an uptrend. Furthermore, you have to worry about some emerging markets as a global slowdown is certainly going to be felt places. The Indian government is not only is the most business friendly, and therefore the US dollar does tend to “buck the trend” against emerging markets in this currency pair at times.

Underneath current trading, the ₹75.50 level might be an area of interest, as it has not only been structurally important previously, but it also has the 50 Day EMA moving into the same area. Because of this, I would anticipate that a certain amount of technical buying may occur if we get to that area. I do believe that it is probably only a matter of time before we continue the uptrend, but if we were to break down below the ₹75 level, then we might have bigger issues at hand.

It is difficult to imagine a scenario where the US dollar sells off for an extended amount of time, simply because the world’s economy seems to be slowing down and of course we have issues when it comes to a whole host of things, not the least of which would be a war in Ukraine. The US dollar is a safety currency, and while the cross between the greenback and the rupee is not necessarily one of the heavily traded currency pairs, US dollar strength or weakness across-the-board typically will have at least some effect on what happens here. Because of this, I think that we are setting up for a continuation of the rally and perhaps a move to the ₹77 level over the longer term. It might take a while to get there, but it certainly looks as if that is what we are setting up to do.