BTCUSD recently formed a symmetrical triangle formation coming from an uptrend, reflecting indecision between buyers and sellers. Price has already broken below the triangle support, indicating that traders picked the southbound route.
However, a pullback to the broken support area might still be possible before the pair carries on with its drop. Stochastic and RSI are both indicating oversold conditions so sellers might need to take a break and let buyers take it from here. Price could retest the broken triangle bottom near the moving averages.
For now, the 100 SMA is below the 200 SMA so the path of least resistance might be to the upside. In that case, price could still move up to the triangle resistance near $445 or much higher, depending on how long bullish momentum lasts.
Data from the US came in stronger than expected yesterday, with the Fed Beige Book acknowledging how most districts reported improvements in economic activity. The ADP non-farm employment change report showed a larger than expected 214K gain in hiring versus the projected 185K increase.
With that, traders might be bracing for an upside NFP surprise, possibly leading to more gains for the dollar or more declines in BTCUSD as traders price in a possible Fed rate hike this month or in the coming months.
Nearby resistance at the $440 area could hold and allow BTCUSD to drop to its current levels at $420 or much lower. The next support areas are located at $400 and $380 then all the way down to $300.
For today, the US ISM non-manufacturing PMI is due and a strong result could allow dollar bulls to charge early. Other factors that could impact market sentiment include updates on the Brexit and crude oil production talks.
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