As we mentioned in yesterday’s trade plan, the altcoin space traded throughout the weekend and during the beginning of the week in almost an exact mirror image of bitcoin. Action throughout Monday evening and during early Tuesday morning maintained this trend, offering up something of a confluence opportunity as we head into the US market open on Tuesday. Here’s what you need to know.
First, as ever, let’s take a quick look at the price action that got us to where we currently stand. As with the BTCUSD, the LTCUSD followed Monday’s trade plan almost to the note, with an initial bearish technical bias offering up an intraday swing trading opportunity. The pair broke through Monday support at 10.3116 to find weekly low support at 9.6787. From this point, the pair has traded within a pretty tight range, now sitting at the top end of this range, just shy of its 200 period SMA. In term support lies at 10.0748 and in term resistance at 10.3116, so watch price action around these levels to offer insight into the potential future direction as the day matures.
Even with the current corrective action in play, the overarching bias still looks to be bearish. Look for a break and close below in term support to offer up aforementioned weekly lows at 9.6787 as an initial downside target.
Having said this, the BTCUSD is currently displaying some upside strength coming out of European lunchtime. With the mirroring action seen throughout the week across the altcoin pairs, the LTCUSD could well follow bitcoin’s lead and display some short term strength. With this in mind, look for a break and close above in term resistance to validate an initial upside target of April 26 highs at 10.8111. A break above this level would hint at further upside and a medium term trend, with a secondary potential target of April 25 resistance at 11.6506.
To contact the reporter of this story; Samuel Rae at Samuel@forexminute.com