BTCUSD Price Technical Analysis – Reversal Signal Seen!

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BTCUSD Price Technical Analysis - Reversal Signal Seen!

BTCUSD has been previously trending higher but it looks like bulls are tired from the climb. Price has failed in its last two attempts to break past the $600 mark, creating a double top pattern with the neckline around $585. Price seems to have broken below this area, signaling that a reversal is in order.

However, the 100 SMA is still above the longer-term 200 SMA so the path of least resistance might still be to the upside. In that case, BTCUSD could still make another run for the $600 resistance level and perhaps even push for an upside break.

In addition, stochastic has been in the oversold region for quite some time, which means that sellers are already exhausted. If the oscillator moves up from the oversold region and keeps heading north, BTCUSD could follow suit. Also, RSI is approaching the oversold region as well, indicating weaker bearish pressure.

US retail sales data are due today and analysts are expecting to see slower consumer spending growth compared to the previous month. For the month of July, headline retail sales could post a 0.4% increase while core retail sales could show a 0.2% uptick, slower than the earlier 0.7% and 0.6% gains respectively.

Even if the figures come in line with expectations or post slightly stronger results, the US dollar could be vulnerable to losses if the readings are not strong enough to revive Fed rate hike expectations for September or December. A large upside surprise might be needed to keep the dollar rallying across the board until the end of the week.

Also, profit-taking is usually seen on Fridays as traders seek to avoid weekend risk. In that case, a bounce off these current support zones could also be in the cards.

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.