LTCUSD has been exhibiting bullish momentum as it breaks one consolidation pattern after another. Price just broke out of a bullish flag pattern and seems to have room to head further north. The mast of the flag spans $52-64 so the resulting rally could be of the same size, probably taking price to $76 next.
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In other words, the rally is more likely to continue than to reverse. In addition, the 100 SMA lines up with the bottom of the latest flag consolidation pattern, adding to its strength as support. The gap between the moving averages is getting wider to signal strengthening bullish momentum.
However, stochastic has already reached the overbought level, which means that buyers might need to take a break and let sellers take over. RSI is heading north but is also dipping into overbought levels, so selling pressure might return at some point. Once both oscillators turn down from the overbought area, a pullback to nearby support levels might take place.
The US dollar is facing an event risk from the non-farm payrolls report, which might set the tone for the September FOMC meeting. Expectations for an interest rate hike have dipped after the latest batch of CPI readings disappointed, but an upbeat jobs report could be enough to support tightening odds at least for December.
The ADP non-farm employment change figure turned out stronger than expected for August while the previous month’s figure was revised higher. However, a disappointing NFP read could revive dollar weakness as traders might see lower chances of another interest rate hike later this year. Traders are also awaiting more details on the balance sheet runoff and the lack of any could also be dollar bearish.
Litecoin has been one of the better-performing cryptocurrencies recently as bitcoin is still facing some issues with rival bitcoin cash.
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