LTCUSD made a strong rally yesterday but price is still stuck inside a consolidation pattern on the 4-hour chart. Price made higher lows and lower highs, creating a symmetrical triangle pattern.
LTCUSD appears to be breaking past the 100 SMA, though, so there might be some bullish momentum present and enough to spur a break past the resistance at 3.150. If so, price could head up to the triangle highs at 3.400.
Near-term resistance is located at the 200 SMA or 3.250, on which profit-taking might take place. From there, a pullback to the broken triangle resistance could be seen before LTCUSD price regains ground.
The dollar has been weakening against most of its peers, including cryptocurrencies, lately as Fed rhetoric is downplaying the odds of a March hike. However, bitcoin has been able to take more advantage of this selloff compared to other digital currencies.
Potential catalysts for a break or bounce include the NFP release today, as analysts are expecting to see weaker jobs gains compared to previous months. This might highlight the speculation that the US economy isn’t that strong to take another rate hike yet, thereby weighing further on dollar demand and lifting LTCUSD.
On the other hand, strong US data could mean a rebound for the dollar, which has been losing ground for the past couple of days. This could take litecoin down to the triangle support at 3.050 once more.
Stochastic is already moving down from the overbought zone, signaling that sellers are taking control of price action. RSI is also on the move down so the path of least resistance is to the downside. In that case, a break below the triangle support might still be a possibility, taking LTCUSD down lower to the triangle bottoms near 2.900.
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