LTCUSD Technical Analysis for 02/28/2018 – Reversal Pattern in Sight!
LTCUSD is forming an inverse head and shoulders pattern on its 4-hour time frame to signal that a reversal might be underway. Price has yet to break past the neckline around $260 to confirm the potential climb, though.
The 100 SMA has just crossed above the longer-term 200 SMA to signal that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. The short-term moving average is holding as dynamic support as well.
Stochastic has been moving lower but is pulling up to show that buyers are ready to regain control. RSI is already moving north to confirm that buying pressure is present. The reversal pattern spans around $150 so the resulting uptrend could be of the same size.
However, dollar demand surged in the latest US session after new Fed Chairperson Powell reiterated his hawkish stance and highlighted the factors likely to keep growth strong. Tightening expectations boosted the US currency while at the same time weighing on riskier assets like stocks and commodities.
Cryptocurrencies appear to be trailing these higher-yielding assets recently so continued risk aversion could dampen gains. However, it’s also worth noting that there were some positive developments in the cryptocurrency industry itself, particularly the acquisition of Poloniex by Circle, that could keep these assets supported.
Besides, US economic data has mostly disappointed so it’s likely that traders might still have some doubts on the Fed’s tightening plan. Another set of downbeat figures could lead market watchers to scale back rate hike expectations and sell the dollar against its counterparts.
Preliminary GDP data is due today and analysts are expecting to see a downgrade from 2.6% to 2.5%. In addition, GDP components related to businesses and trade are also foreseen to be weaker in the current quarter.
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