Forex Minute Trade Plan – Altcoin 02/05/2014

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Forex Minute Trade Plan - Altcoin 02/05/2014

Forex Minute Trade Plan - Altcoin 02/05/2014

As mentioned in today’s bitcoin trade plan, the Bloomberg announcement that the company will include a bitcoin quote on its terminal system should boost credibility of the altcoin space in the coming months. Whether the credibility boost will filter through to some of the lesser known crptocurrencies remains to be seen, but it will have some impact on bitcoin’s closest rival litecoin. So what are the levels to watch on Friday?

First, let’s take a quick look at the latest action in the LTCUSD. The pair has mirrored the BTCUSD in its volatility over the week, but its intraday movements have differed somewhat. From support at 9.6787, litecoin strengthened versus the greenback to weekly highs at 11.3966 on Thursday. From these highs, the pair corrected to its current levels, trading just shy of its 200 SMA at 10.5302.

The level to keep an eye on as the day matures will be in term support at 10.3993. A break below this level would hint at further weakness heading into the weekend, with April 29 support offering up an initial downside target at 10.2455. Beyond that, lows at 10.0748 will come into play as a potential secondary downside goal.

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If the fundamentals take hold however, the pair may have already carved out daily lows and could be set for gains as the day matures. A failed retest of aforementioned in term support would offer up a bullish technical bias, and a break above the 200 SMA would validate 10.8111 as an initial upside target. A break, and close, above this level would bring 11.1038 into play, and could indicate fresh weekly highs.

As ever, keep a strong reign on your risk management. The volatility seen across the markets over the past two to three days shows just how quickly these nascent pairs can turn, and tight stops are  must so as to avoid getting caught out on the wrong side of a sharp move.

To contact the reporter of this story: Samuel Rae at Samuel@forexminute.com