BTCUSD has shown a bullish candlestick pattern in the form of three white soldiers on its weekly time frame. This formation constitutes three long green candles with little to no wicks, indicating a strong bullish run and a likely continuation.
This formation is usually considered a stronger bullish signal when formed at the end of a downtrend but is just as potent when seen after a period of consolidation. This signals that sentiment has turned very positive for BTCUSD and that further gains are in the cards.
The 100 SMA is above the 200 SMA, confirming this upward momentum. However, the gap between the moving averages is narrowing so a downward crossover and a return in selling pressure might be possible. In that case, a quick pullback to nearby support zones could be seen on profit-taking activity.
Stochastic is already indicating overbought conditions, which means that buyers might be exhausted and ready to let sellers take over. Similarly, RSI is in the overbought area but hasn’t crossed lower yet so buyers might have enough energy to push for more gains.
Looking at the weekly time frame reveals that the next potential resistance zones are at $800-850 then at $900-1000. Keep in mind that strong rallies typically occur at the end of each week with plenty of uncertainties in the financial markets driving traders towards alternative investments and away from traditional assets like currencies and equities.
The FOMC statement today could prove to be a catalyst for a strong move in either direction, as policymakers are expected to confirm or negate expectations of a rate hike this month or the next. Fed officials have mentioned that a potential Brexit could prevent them from acting while market watchers are also wary about the impact of the latest NFP release on policy biases.
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