Litecoin continues to trade within an ascending triangle consolidation since making a low at 1.30 at the end of April. As we get into the 5/14 US session, we see some bullish bias.
Here are some bullish signs.
1) First of all, an ascending triangle itself has a bullish bias. However, the prevailing trend has been bearish, so it kind of neutralizes the overall bias. But based simply on the consolidation structure, we are seeing a slight bullish bias because of the higher lows.
2) The RSI has been near 70 and held mostly above 40. This shows maintenance of a very slight bullish momentum.
3) Finally ,the moving averages are crossing back into bullish alignment, and price is starting to hold above them this week.
With regards to a breakout, a bullish breakout is more meaningful than a bearish one. Why? Because of the constant build up of stops just above 1.50 every time the market faded the pair from that resistance. The support pivots have been changing, so there is no build up on one particular level. The most recent price action shows a spike below the rising trendline. A false breakdown can translate into a bullish breakout, especially as we approaching the triangle apex. Let’s take a look at the 1H chart.
The 1H chart also shows some bullish bias. It is mostly a sideways market in the short-term, but note that price has held above the 200-hour SMA since last week. Also, the RSI has tagged above 70, but held mostly above 40 since last week.
Here’s what to look for. The spike down during the 5/14 US session puts pressure to the upside. Before the spike, there were common resistance just under 1.47. Now, if price reverses from the spike and climbs back above 1.47, look for a strong threat against the 1.50 resistance. Above 1.50, the 1.60-1.62 resistance area will be in sight.
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