Recent action in the LTCUSD has diverged somewhat from the action seen over the past few months, whereby the fluctuations in the value of litecoin would effectively mirror those of bitcoin. For this reason, and combined with the fact that there has been no market moving litecoin news out of the cryptocurrency universe on Wednesday, today’s altcoin trade plan will revolve simply around price action and key historic levels.
So, as ever, a quick look at the action that brought us to where we are today. The LTCUSD bottomed out at support of 9.6787 on Monday, and has since been steadily gaining strength. Having broken through in term resistance at 10.3116 on Tuesday, the pair rallied sharply to reach just shy of April 25 resistance at 11.1038, before correcting to find support at the 200 period SMA.
Action from this support has returned the pair to intraday highs, and aforementioned resistance at 11.1038 now serves as an in term level to watch. A break above highs (and in turn in term resistance) would validate an intraday bullish technical bias, and offer up a number of key levels as upside targets. First comes April 19 support at 11.4190, and beyond that, April 24 support at 11.6506. Even with the recent volatility in the pair, it is unlikely we will see the LTCUSD move much higher than the latter of these two targets, at least on an intraday basis.
Looking the other way, a break below in term support at 10.8111 would offer up a bearish intraday technical bias, with an initial downside target between previous support at 10.3116 and the pair’s 200 period SMA. Beyond that, look for a break of April 28 resistance to bring weekly lows of 9.6787 into play.
When using this sort of key level strategy, it is important to keep stops tight so as to avoid getting caught on the wrong side of a large move. As you enter trades, place stops just the other side of your entries to limit your exposure.
To contact the reporter of this story: Samuel Rae at Samuel@forexminute.com