BTCUSD Price Technical Analysis – One More Channel Bounce


BTCUSD price bounced off that ascending channel bottom as expected last week and headed straight for the resistance. Another pullback to the channel support is taking place, and another bounce might be due.

The channel support lines up with an area of interest that previously held as resistance. This also coincides with the 100 SMA, which usually holds as dynamic support. A larger pullback could last until the 200 SMA around $604.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In that case, BTCUSD could make its way back up to the top of the channel at $616 or higher.

Stochastic is making its way up, confirming that buyers are in control of price action. RSI is also heading north so BTCUSD could follow suit. However, once these oscillators hit the overbought zones and turn lower, selling momentum could return.

The pickup in risk appetite on Friday was enough to spur rallies for the cryptocurrency, as investors’ fears concerning Deutsche Bank receded. However, over the weekend, UK Prime Minister Theresa May confirmed that Article 50 would be invoked by the first quarter of 2017, reviving Brexit-related concerns for the UK economy and the rest of the world.

As for the US dollar, the main event risk for the week is the release of the September NFP. This should give traders a better idea of whether the Fed can be able to hike interest rates before the end of the year and when. Prior to this, leading jobs indicators such as the ISM manufacturing and non-manufacturing PMI reports, as well as the ADP non-farm employment change reading, are lined up.

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.