Ripple Technical Analysis for 08/04/2017 – Inverse Head and Shoulders

Ripple could be in for a short-term rally as price now formed an inverse head and shoulders pattern. Price is already completing the right shoulder and test the neckline around 0.1800.

A break past the neckline resistance could lead to a climb of around 0.0200, which is the same height as the inverse head and shoulders formation. This could take price up to the 0.2000 area or higher.

The 100 SMA crossed above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. This means that the rally is more likely to happen than to reverse. But if the neckline holds as resistance, Ripple could head back to the bottom at 0.1550.

Stochastic is turning higher without even hitting oversold levels to signal that buyers are eager to get back in the game. RSI is treading sideways to signal that further consolidation is possible.

Cryptocurrencies are regaining ground as there have been no major issues in the bitcoin hard fork so far but alternative digital currencies are able to take advantage since they don’t face an imminent split yet.

Meanwhile, dollar demand is also weakening leading up to the NFP release. Leading indicators are hinting at weaker hiring growth for July, which might undermine tightening expectations for the Fed. A very weak reading could throw September rate hike expectations out of the window and cast doubt on December tightening. This might also delay the balance sheet runoff, which would be very bearish for the dollar.

On the other hand, a strong upside surprise could keep tightening expectations strong and supportive of more dollar rallies. Keep in mind, however, that the political situation in Washington isn’t exactly most stable at the moment after the shakeup in White House senior officials and the ongoing probe into the Russian intelligence information leak. Evidence that they did interfere with the 2016 elections could keep impeachment fears in place, which would also delay the fiscal reform of the administration.