LTCUSD is trending higher, moving above an ascending trend line connecting the lows since mid-August. Price is in the middle of a pullback from its recent rally and is currently testing support at the 50% Fibonacci retracement level.
If this level keeps losses in check, LTCUSD could resume its climb to the swing high around $55.50. The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. The gap between the moving averages is widening to reflect strengthening bullish momentum.
The 200 SMA lines up with the rising trend line, adding to its strength as support in the event of a larger correction, while the 100 SMA is closer to the 61.8% Fib. This retracement level is also close to a former resistance level around $48, which might now hold as support.
Stochastic is pointing down to indicate that selling pressure is in play. RSI is also on the move down so LTCUSD might follow suit. Once both oscillators reflect oversold conditions and turn higher, buying pressure could return and push price up to the recent highs and beyond.
Litecoin is giving up its gains from the bitcoin price drop earlier in the week as the latter is regaining bullish traction following the activation of SegWit. There have been doubts about this upgrade as rival version bitcoin cash gained more mining power in the past few days, attracting investor demand as well.
Any indication that the upgrade went by without a hitch could push bitcoin back to its record highs or higher, which could force the competition including LTCUSD to retreat. On the other hand, complications surrounding the hard fork and upgrade could spur stronger demand for alternative cryptocurrencies.
The dollar is treading carefully as traders await Fed Chairperson Janet Yellen’s speech during the Jackson Hole Symposium. Cautious remarks could douse rate hike hopes for December or September, which could be dollar bearish and bullish for litecoin. On the other hand, hawkish hints could drive the dollar higher across the board.
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