Ripple broke out of its long-term downtrend then broke down from its short-term uptrend recently. Price is testing an area of interest that might hold as support and confirm that a long-term uptrend is underway.
In particular, an inverse head and shoulders might be forming if Ripple bounces of the 0.1700 level. The neckline at the 0.2000 major psychological barrier has yet to be broken before price seals the deal on its climb. The chart pattern spans 0.1300 to 0.2000 so the resulting climb could be of the same size.
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. However, the gap between the moving averages is narrowing to signal a potential return in selling pressure that might lead to a break of the area of interest and a test of the lows at 0.1300.
Also, stochastic is pointing down to signal that bears are in control of Ripple movement. A bit of a bearish flag formation at the area of interest can also be seen so there’s still a chance that another drop could take place. RSI is on the move up, on the other hand, to signal a return in bullish pressure.
However, with all that’s supporting cryptocurrencies like Ripple these days, dollar demand could emerge as the main driving factor for the week. The FOMC statement is coming up and traders would like to find out if the Fed would maintain its tightening bias and give more details on its balance sheet unwinding operations.
Also, the progress of the healthcare repeal in Senate has renewed expectations of fiscal reform from the Trump administration. Recall that a number of setbacks in the past led investors to weaken speculations of tax cuts, which could ultimately lead to stronger stock market performance and overall economic growth.
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