LTCUSD recently broke out of its triangle consolidation pattern to signal that more gains are underway. Price stalled upon hitting the 46.85 level and could be due for a pullback to the nearby support levels.
Using the Fib retracement tool on the upside breakout move shows that the 50% and 61.8% retracement levels are close to the broken triangle resistance from $41.25-42.30. Meanwhile, the 38.2% Fib is right in between the moving averages.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is still to the downside. This means that the selloff is more likely to resume at this point, but an upward crossover could change that.
Stochastic is also heading lower to signal that sellers are in control of LTCUSD action for now. RSI is just turning lower from the overbought region to indicate a pickup in selling pressure as well.
The US dollar could continue to climb after seeing stronger than expected NFP data on Friday. The US economy added more jobs than expected in July while the previous month’s figure also saw an upward revision. Fed rate hike expectations for September are still in play, along with expectations that the central bank could start its balance sheet runoff soon.
Meanwhile, the positive sentiment in the cryptocurrency industry following bitcoin’s hard fork and the lack of any major issues has also allowed other digital assets like litecoin to advance. This behavior could keep up for as long as there are no incompatibility concerns that arise from the existence of two versions of bitcoin software. After all, the upgrade has still allowed the network to handle more transactions than before.
The next event risks for the dollar are the US CPI release later this week then the retail sales next week. FOMC members are also scheduled to give testimonies throughout the week and their policy bias could influence LTCUSD movement. In particular, less hawkish remarks could allow litecoin to take advantage of dollar weakness.
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