LTCUSD Technical Analysis for 10/09/2017 – New Uptrend Channel

LTCUSD has recently broken past the descending channel highlighted in a previous article, indicating that a reversal is due. Price is currently testing the channel support around the 61.8% Fibonacci retracement level and $52.50 minor psychological support.

A reversal candle has formed, indicating that bulls are defending that level and might be strong enough to push for a climb back to the resistance around $54.50 or the swing high to $54.72. Stochastic is indicating oversold conditions to show that buyers might take over and is even exhibiting a bit of bullish divergence. RSI also seems to be turning higher to reflect a pickup in buying pressure.

However, the 100 SMA is still below the longer-term 200 SMA to signal that the path of least resistance is to the downside. The 100 SMA has held as dynamic support, though, and the gap is narrowing to signal a looming upward crossover and return in bullish momentum.

The US dollar managed to hold on to its recent gains and go for more even after the NFP report printed weaker than expected results. For the month of September, the economy lost 33K jobs instead of gaining the expected 88K but the previous reading was upgraded from 156K to 182K, giving traders hope that the latest figure could be revised higher later on. Also, the 0.5% uptick in average hourly earnings surpassed the consensus of a 0.3% gain, signaling positive wage growth that could feed into overall inflation later on.

Meanwhile, cryptocurrencies appear to be on the up and up lately as investors are shrugging off the previous developments from China and are focusing on the more positive updates. One of these is the addition of bitcoin trading to Brazil’s largest financial institution and the other is the proposed regulatory framework for blockchain-based assets in Europe.

Catalysts for this week include the FOMC minutes and the release of US retail sales, PPI, and CPI that could influence Fed rate hike expectations for December.