LTCUSD is likely extending a recent consolidation with some near-term downside risk.
(click to enlarge)
Looking at the 1H chart, you can see that price has been consolidating since it tagged 9.15 a couple of weeks ago. It came down to 8.20 and then rallied above a near-term trendline resistance.
However, price was unable to clear above a support/resistance pivot at 8.85. This suggests that bulls are not committed yet, and LTCUSD could be in for a longer period of consolidation.
During the weekend, price action signaled further bearish correction.
1) Price is fell below the near-term rising trendline from July 16.
2) Price fell below the short-term rising trendline from July 5.
3) Price fell below the 200-, 100-, and 50-hour SMAs.
4) The RSI was not able to stay above 40 after it almost tagged 70, which shows lack of bullish momentum.
Looking at the 1H chart, and projecting the 9.15-8.20 swing from the 8.85 area, we get a projection to roughly the 7.95 level, which is a previous resistance during July 9-12. This scenario would be an ABC-correction scenario, and the medium-term outlook remains bullish after the correction. Look out for price to rebound after this C-leg of bearish correction, especially if the RSI shows bullish divergence with price in the oversold area (around 30).
For the bullish outlook to re-emerge, price will have to at least push back above the 200-, 100-, and 50-hour simple moving averages, and push the RSI back above 60 to show lost of bearish momentum.
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