BTCUSD price has formed lower highs and higher lows, creating a symmetrical triangle chart pattern on the 4-hour time frame. Price is bouncing off the triangle support and the 100 SMA, indicating that it might be due for a test of resistance soon.
However, stochastic is on the move down so bears are in control of price action. Similarly, RSI is heading south so BTCUSD price could follow suit. If a downside break of support around $450 is seen, price could be in for a drop to the triangle lows at $430.
On the other hand, an upside break of the resistance at $457 could mean gains until the triangle top at $470. The 100 SMA is above the 200 SMA so the path of least resistance is still to the upside.
Event risks for this setup include the US CPI release later today. Slightly stronger gains in price levels are expected, although downbeat results could spur dollar losses. Keep in mind that the PPI readings released last week came in somewhat below expectations.
The FOMC minutes could prove to be a bigger catalyst mid-week, as this would shed more light on the likelihood of a June rate hike. Although their earlier rate statement suggested that they might sit on their hands for much longer, testimonies from a few FOMC officials showed that there’s still a good degree of optimism among members of the committee.
Other factors that could influence market sentiment and BTCUSD trends are the changes in commodity prices. Crude oil has been on a tear lately, supporting higher-yielding currencies and assets so far. However, data from China released over the weekend revealed that the slowdown is far from over, possibly keeping a lid on risk rallies.
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