LTCUSD recently broke past a short-term descending trend line to signal that an uptrend is in order. Price has moved sideways since the breakout, however, which means that buyers are still holding out for more catalysts.
An upside breakout from the current triangle consolidation pattern could lead to a rally to the next area of interest at 48.00. The consolidation pattern spans 40 to 44 so the resulting breakout could be of the same size. If this is treated as a bullish flag pattern, then the basis for the rally would be the mast of the flag, which is also 4.00 in height.
The 100 SMA crossed above the longer-term 200 SMA to signal that the path of least resistance is to the upside. In other words, the rally is more likely to carry on than to reverse. LTCUSD was also able to complete a pullback to the broken trend line resistance to signal that more bulls are joining in.
Stochastic is pointing up to show that buyers are in control of price action. However, this oscillator is already dipping into the overbought level to signal that sellers could regain the upper hand if profit-taking happens. RSI is also pointing up to signal that there’s some bullish pressure left to spur more gains.
Sentiment for cryptocurrencies has improved after bitcoin went thru the hard fork without much issues yet. Also, this spurred stronger demand for alternative digital assets like Ripple or litecoin that don’t face an immediate split just yet.
Meanwhile, dollar demand could also influence LTCUSD action for the next few days as traders are waiting on the NFP closely to see what the Fed’s next moves might be. Strong data could keep tightening expectations in place, which would be bullish for the dollar versus litecoin. On the other hand, weak results could weigh on dollar demand and rate hike expectations, especially since Washington has several issues to contend with before pursuing its fiscal reform agenda.
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