BTCUSD is still inside its symmetrical triangle consolidation pattern visible on the 4-hour time frame but seems to be considering a breakdown. Price is slightly below the triangle support and could gain additional downside momentum on today’s market catalysts.
Dollar rallies are pausing after the ISM manufacturing PMI came in much weaker than expected and showed another contraction in hiring. The reading fell from 52.6 to 49.4, lower than the estimated fall to 52.0 and indicative of industry contraction.
This could mean a potential downside surprise for the NFP report, which is slated to show a 180K increase in hiring for August, lower than the previous 255K gain in July. The unemployment rate is expected to fall from 4.9% to 4.8% while the average hourly earnings figure could see a 0.2% uptick.
Stronger than expected data could reinforce dollar gains on higher Fed rate hike odds before the end of the year. After all, policymakers did specify that they’re waiting to see stronger evidence of hiring gains before deciding to tighten. Weaker than expected results, on the other hand, could douse these rate hike hopes and trigger a sharp selloff for the dollar.
A long red candle closing below $565 could be enough to confirm a downside breakout in this BTCUSD triangle. On the other hand, a bullish candle closing past $575 could mean an upside breakout, suggesting further gains for BTCUSD.
The triangle pattern is around $70 tall so the resulting uptrend or downtrend could last by the same amount. The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside, but the gap between the moving averages is narrowing so an upward crossover is also possible.
Stochastic is pointing up to show that buyers are trying to take control of price action. RSI is on middle ground, barely offering strong directional clues at the moment.