BTCUSD Price Technical Analysis – Another Breakout Looming?

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BTCUSD Price Technical Analysis - Another Breakout Looming?

BTCUSD Price Technical Analysis - Another Breakout Looming?

BTCUSD price recently made a sharp drop following a test of the major resistance at $470. Price has found support at $435 then formed higher lows, creating an ascending triangle pattern on the 1-hour chart.

Price is on its way to test the resistance of this formation around $455-457 and another bounce might take place. The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. Also, stochastic is on the move down from the overbought area to indicate a return in bearish momentum.

RSI, meanwhile, is on middle ground and barely providing any directional clues at the moment. This suggests that consolidation could carry on an BTCUSD might keep bouncing inside the triangle pattern for a while.

There are no major catalysts lined up from the US economy early in the week so traders could hold out of the release of the top-tier NFP report on Friday. Stronger than expected data could renew calls for a Fed rate in June, even though the latest FOMC statement contained a more cautious economic outlook.

Weaker than expected data, on the other hand, could lead to an upside breakout for BTCUSD and another test of the $470 long-term resistance. Recall that the advance US GDP reading fell short of expectations with a 0.5% expansion instead of the estimated 0.7% growth so downbeat jobs growth could reinforce forecasts of a slowdown.

Other factors that could affect BTCUSD trading for the rest of the week are potential changes in market sentiment. Over the weekend, China printed slightly weaker than expected PMI readings for both the manufacturing and non-manufacturing industries. The Caixin version is still due later on in the week and weak readings could keep risk-taking in check, which could drag BTCUSD down.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.