BTCUSD made an upside breakout from a triangle consolidation pattern on its 1-hour time frame, signaling that bulls have taken control. Price consolidated in a bullish flag continuation pattern from here, and another upside break could draw more buyers to the game.
The 100 SMA is above the longer-term 200 SMA and is increasing the gap, indicating that bullish momentum is taking hold. However, if a pullback takes place, BTCUSD could still draw support from the dynamic support at these moving averages.
Stochastic is on middle ground and barely providing any strong directional clues for now. However, the oscillator is on the move down and so is RSI so BTCUSD price could follos suit.
In that case, BTCUSD could retreat to the broken triangle resistance around $450 before resuming its climb, possibly until the current highs near $460 or until the longer-term ceiling at $470. Note that the breakout move was approximately $20 tall so the resulting breakout from this flag pattern could last by the same amount.
On Friday, the US printed a downbeat NFP reading, indicating that the economy added only 160K jobs in April instead of the estimated 203K increase. This reminded dollar traders that the Fed isn’t likely to increase interest rates in June, thereby dampening demand for the currency and keeping risk-taking in play.
Over the weekend, China printed a stronger than expected trade balance reading which showed a larger surplus. However, components of the report showed a 10.9% drop in imports or domestic demand and suggested that the export gains may have been spurred mostly by exchange rate fluctuations.
There are no major reports lined up from the US economy today or during the first half of the week, as the top-tier retail sales and PPI figures aren’t due until Friday. Strong data could renew demand for the currency while weak readings could underscore the lower odds of Fed tightening next month.
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