ETH/USD according to the Ichimoku cloud indicator remains in a bullish trend. We use the Ichimoku cloud indicator in order to identify key support levels that if broken could signal more weakness and a possible pull back to come, taking into account the bearish divergence we noted in our previous analysis.
In the 4 hour chart trend remains bullish. Not strong bullish but bullish. Price is above the Kumo (cloud). Support by the cloud is at $1,310-$1,263. Breaking below the Kumo will be a bearish sign that would imply more downside. The downside target will be seen in the Daily chart below. In the 4 hour chart the tenkan-sen (red line indicator) has crossed below the kijun-sen (yellow line indicator) and this is not a good sign. Bulls want to see the tenkan-sen cross above the kijun-sen again in order to get a bullish signal.
In the Daily chart price is trading below the tenkan-sen. This is an initial weakness sign. Where can this lead to? If in the 4 hour chart we see the cloud break, then in the Daily chart we will expect price to challenge the kijun-sen at $1,200. If $1,200 fails to hold then we should expect price to test the Kumo around $1,000. Until then there are lots of support levels that need to be broken. But we need to keep an eye on the bigger picture if support levels start breaking. On the other hand if price breaks above $1,390 we should not be surprised if we see a new all time high towards $1,500.
