With no real market moving news in the altcoin space, it looks likely that the prices of its constituent currencies will somewhat mimic those of bitcoin. A number of fundamental drivers mentioned in today’s BTCUSD trade plan will likely drive intraday volatility across the major altcoin pairs, namely the People’s Bank of China’s refraining from regulation and the news that Mt Gox’s application for civil rehabilitation has been denied by a Japanese court.
So what’s the best way to approach the LTCUSD on Wednesday?
First let’s take a look at how we got to the current point in the pair. Much akin to the BTCUSD, litecoin has had a strong week. The strength comes after extreme volatility last week saw the altcoin carve out fresh monthly lows against both the dollar and a number of other altcoins. The LTCUSD broke through resistance at 11.6007 as the markets opened on Tuesday to reach fresh weekly highs at 12.1556. The gains continued throughout the day and a Wednesday morning rally saw the pair carve out new monthly highs at 14.2290 as the US session started.
A small correction has put the LTCUSD in a short term range, which offers up the key levels to watch.
A break above in term resistance at 13.1006 would offer up a bullish intraday technical bias, and an initial upside target of aforementioned highs at 14.2290. A break, and a close, above this level would suggest a medium term continuation of the week’s bullish action.
Conversely, a break below in term support at 12.1556 would offer up a bearish intraday bias, and an initial downside target of Monday resistance at 11.6007. A close below this level would suggest a medium term reversal of the week’s overarching uptrend, and offer up a secondary downside target of Monday support at 11.0779.
As with the BTCUSD, there could be come considerable volatility in the LTCUSD before the day is out. The current technical bias suggests further upside, but keep a close eye on the fundamentals to gain insight into any potential reversal catalysts.
To contact the reporter of this story; Samuel Rae at Samuel@forexminute.com