Ripple broke below the complex double top formation highlighted in a previous article. This signals that a selloff is due and price could all by around 0.0400 or the same height as the chart pattern.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. However, the moving averages are sticking together to show that an upside crossover is possible and this might draw more buying pressure.
Stochastic is heading lower so Ripple might follow suit, but the oscillator is already nearing the oversold area to signal bearish exhaustion. In other words, sellers might want to book profits soon and allow buyers to regain the upper hand.
RSI is also pointing down to reflect the presence of selling pressure, but this oscillator is also approaching oversold conditions to signal a potential bounce. Price could still retest the broken neckline support around 0.1600 before heading further south.
Dollar demand has recovered when tensions with North Korea eased after Kim Jong Un mentioned that they’d wait for the next moves of the US before executing their missile strike plan on Guam. So far, there have been no provocations from the US side of things so traders are starting to revive their risk appetite.
During these cases, cryptocurrencies usually take a hit as investors put their funds back in traditional markets like stocks and commodities. A return in risk aversion, on the other hand, could spur demand for digital assets like Ripple once more since these offer higher returns outside of traditional markets.
Data from the US economy has been mixed so traders don’t have clear clues on the next Fed rate hike. CPI figures have been disappointing so policymakers might express some concern again while retail sales have beat expectations in July and enjoyed positive revisions in June. The FOMC minutes are up for release soon and any changes in policy biases could have a strong impact on the dollar across the board.
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