BTCUSD has been stuck inside a long-term symmetrical triangle formation but has recently broken to the upside. This signals that price is in for a longer-term uptrend, although a pullback might need to take place first. Applying the Fib tool on the latest swing high and low reveals that the 61.8% level coincides with the top of the triangle, which might now hold as support. In addition, this is also near the 100 SMA dynamic support.
Speaking of moving averages, the 100 SMA is safely above the longer-term 200 SMA and is increasing its lead, which means that bullish momentum is present. If any of the Fib levels hold as support, BTCUSD could climb back up to the previous highs at $450 and beyond.
Stochastic, however, is pointing down so sellers might take control from here. Also, RSI is heading south so price could follow suit and retreat to the near-term support areas. If these break, BTCUSD might go for a move below the triangle support and a prolonged selloff.
Profit-taking ahead of the weekend could lead to some declines for bitcoin, as traders might close their short dollar positions. Still, the dollar has been experiencing weaker demand lately with weak data from the US, mixed earnings reports, and the FOMC statement coming up next week.
No policy changes are expected from the Fed but policymakers could take a more cautious stance since US retail sales, PPI, and CPI have all missed expectations last week. Traders are also waiting to find out what the Fed special closed meeting a few days back was all about.
Short-term traders could take advantage of this potential selloff while longer-term traders hoping to catch directional plays could wait for a correction or a possible entry early next week.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com […]
