LTCUSD has been forming lower highs and higher lows, creating a symmetrical triangle pattern on its 1-hour time frame. Price is now testing the triangle support and might be due for a bounce back to the top.
Technical indicators are giving mixed signals, with the 100 SMA below the 200 SMA and suggesting that the path of least resistance is to the downside. RSI is also pointing down, which suggests that sellers could take control.
If so, LTCUSD could be in for a downside break of the triangle support at 3.400 and possibly further losses until the triangle bottom at 3.200. However, stochastic is on the move up, signaling that there’s some buying pressure left enough for a test of the triangle resistance around 3.475.
Stronger buying pressure could even lead to a break above this resistance, likely taking LTCUSD up to the triangle highs at 3.570 or higher. This could depend on the event risks lined up for the rest of the week.
Earlier today, China printed weak PMI readings, suggesting that risk appetite might stay weak. The official manufacturing PMI reading fell from 49.4 to 49.0 and the non-manufacturing PMI fell from 53.5 to 52.7, indicating a slowdown on both fronts.
Soon after, the RBA statement gave market watchers a bit of assurance that the global economy could be poised for a recovery and that they’re ready to dole out stimulus if necessary. Up ahead, the US ISM manufacturing PMI is due and an improvement is eyed.
Stronger than expected data could lead to more dollar gains against litecoin throughout the week, as traders anticipate strong NFP results for Friday. Disappointing data, on the other hand, could lead to weaker expectations of a Fed rate hike this month and more dollar declines.
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