- The July NFP report was more bearish than bullish for the US dollar
- Ethereum keeps failing at $2,000, but the series of higher lows remains intact
- Only a break below $1,300 would invalidate the bullish setup
Market participants view the July NFP report released last Friday as neutral. On expectations of 205k new jobs in July, the US economy delivered 187k – an impressive number, close to the estimate.
Moreover, the unemployment rate declined to 3.5% from 3.6%, indicating that the labor market remains resilient.
However, details in the report do not offer such an optimistic perspective. For example, most jobs were created in three sectors alone (government, health, and education). Also, the AHE (Average Hourly Earnings) increased MoM, suggesting that the Fed’s fight against inflation is far from over.
Furthermore, the previous NFP number was revised down – again. This was the sixth consecutive month when the jobs number was revised down.
Therefore, the July NFP report was more bearish than bullish for the US dollar. Yet, the markets did not react on Friday but might do so in the week ahead.
Unless ETH/USD breaks below $1,300 the bullish bias continues
The technical picture looks bullish despite Ethereum being in a consolidation area for the last twelve months. More precisely, it looks like the market builds energy to break higher.
Therefore, the path of least resistance is to break above $2,000.
However, the market needs to keep the series of higher lows intact to remain bullish. In other words, the bullish bias would quickly turn bearish if the ETH/USD price drops below $1,300. Until then, expect bulls to keep bidding for a break above the $2,000 resistance level.