Ripple Technical Analysis for 07/05/2017 – Smaller Triangle Pattern

Ripple has been consolidating more tightly recently, forming a smaller triangle pattern inside the larger one visible on the 4-hour chart. Price bounced off support on the longer-term triangle but has failed to show significant bullish momentum back to the top.

It is currently testing support at the smaller triangle and a downside break could also lead to a move below the longer-term triangle support. The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. In other words, a selloff is more likely to happen than a rally. In addition, these moving averages are close to the triangle resistance, adding an extra barrier on the move up.

A downside break could lead to a drop of the same height as the triangle, which spans 0.1400 to 0.3800. Similarly, a break higher could lead to a rally of the same height. Stochastic is pointing down, also indicating that sellers are in control of price action. RSI, on the other hand, is moving sideways to hint at further consolidation.

US traders are out on the Fourth of July holiday so it’s understandable why price action is subdued. Once markets reopen, volatility could kick in and lead to a strong move for Ripple. The company behind Ripple is focused on building a better bitcoin as it wants to handle transaction volume on a higher scale. The company approaches banks with its enterprise software, along with the Interledger Protocol. They propose a corresponding banking paradigm in which banks with no direct relationship rely on intermediaries in order to send payments to each other.

Also, the FOMC minutes are up for release today and hawkish remarks confirming that another rate hike is in the cards before the end of this year could shore up dollar demand again. Traders are also eager to find out when the Fed might start unwinding its balance sheet.

Apart from that, NFP speculations could also come into play as this would also set the tone for Fed policy. Stronger than expected results could drive rate hike expectations higher and lead to more gains for the dollar versus Ripple.