- Dogecoin price jumps nearly 2% intraday and breaks above a very important technical level.
- DOGE sees bulls trading the technical cap, and a daily close could be important going forward.
- With resistance turning into support, DOGE is set to rally 11% this week.
Dogecoin (DOGE) price action sees bulls frontrunning the US inflation numbers for this Thursday as some second-tier data out of the US and European inflation numbers point to a slowdown in both inflation and the economy. This makes traders dream of a Goldilocks scenario of lost investments over 2022. It seems it is payback time for the bulls toward the bears, with DOGE set to jump toward $0.085 this week.
Dogecoin price could get squeezed 11% higher
Dogecoin price is seeing bulls storming out of the gates this morning as equities rally higher across the board. The risk-on sentiment comes on the back of US ISM Manufacturing data, pointing to a slowdown in activity. On any normal given day, this would be bad news and trigger risk-off sentiment. Instead, markets are rallying as this slowdown is what the US Federal Reserve wanted to achieve with its rate hikes. As these elements are materialising, a pause or rate cut from the US Federal Reserve could soon be in the cards.
DOGE thus sees traders prepositioning as part of this rally, which could probably bring DOGE back above $0.10. That is further down the line though, with first on Monday bulls trying to break, hold and close above the 200-day Simple Moving Average (SMA), which has been a bearish element in the last few weeks of December. Once that level near $0.074 turns into support, a rally toward $0.085 is the next domino to fall. The monthly pivot for January and the 55-day SMA would then arrive as a double cap to trigger a cool-down moment in the rally.
DOGE/USD daily chart
It will become risky if bulls cannot close above that 200-day SMA this evening near the US closing bell. A close below would expose the long positions bulls have built and might see DOGE price drop in search of support near $0.070. This might seem minor, but with the US inflation numbers on Thursday risk could build that a disappointing number might trigger a sell-off and see Dogecoin price back at $0.065.