Chainlink comes close to $8 but can't escape gravity

Chainlink (LINK) price action sees traders getting ready to build up long positions as a strong rally is unfolding with a three-day winning streak for Chainlink price. Day three’s gains were a close call, however, as the ADP private sector jobs report on Wednesday revealed more jobs being added, which could possibly point to an equally strong Non Farm Payrolls (NFPs) report on Friday . Despite US dollar strength, LINK price is set for another probable daily gain for the week, although the tide could turn on Friday.

LINK price at the mercy of the US jobs report on Friday

Chainlink price action is enjoying this trading week, with over 10% of gains on the docket thus far. Bulls came storming out of the gates on Monday with the incentive that the worst scenarios are priced in for now as energy prices tanked massively from their highs, opening a bit more relief for the eurozone and the worldwide energy crunch. Additionally, traders are starting to forecast the end of the Fed's hiking cycle, which is pulling its base rate higher at a breakneck pace.

LINK price, however, tells a telling tale: on Wednesday, ADP numbers beat estimates by a wide margin and could point to a strong NFP report on Friday. Although the ADP has no correlation with the NFP, its methodology was recently revamped and it is too soon to say whether the new report provides a valid indicator for the Bureau of Labour Statistics report. As such it may well be a factor worth considering. Stronger jobs data would mean more rate hikes, even going into 2023. That, in turn, would mean a stronger dollar which would be negative for the dollar-denominated LINK price, pushing it back toward $5.26 potentially to challenge the year's low.

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LINK/USD Daily chart

With the monthly pivot at $7.50 and the 55-day Simple Moving Average (SMA) close by, the level is likely to be supportive. This time the 55-day SMA is unlikely to be broken as in the past, but rather more likely to work in tandem with the monthly pivot to trigger a bounce in LINK price, leading to a new high for the week.  A test of $8.50 is possible, with the monthly R1 resistance level coming in as a cap. Not much higher, the 200-day SMA comes into play at $9 and holds 15% of gains for bulls that venture to take on the rally.