ETHXBT is still trading inside a symmetrical triangle pattern on its 4-hour time frame and has just bounced off support. This could put price on track to testing the triangle resistance at the 0.03000 handle. However, the 100 SMA is below the 200 SMA so the path of least resistance might be to the downside. Stochastic is on the move up to indicate that buyers are in control of price action for now, but the oscillator is almost in the overbought zone. Similarly RSI is heading north so ETHXBT could follow suit but sellers could return once the oscillator turns down from the overbought level.
If so, ETHXBT could break below the triangle support at 0.02500 and trigger a longer-term drop in price. The next visible support is located at 0.02000. On the other hand, strong bullish momentum might lead to a test and break past the triangle resistance.
Demand for virtual currencies has picked up recently again, thanks to the persistent uncertainties in the financial markets. For one, there are several central bank decisions lined up this week and expectations of policy changes or switches in biases could prompt a lot of volatility among fiat currencies, discouraging traders from seeking returns in these assets.
In particular, the FOMC decision could spur a lot of spikes for dollar pairs as traders are counting on words of caution from the US central bank. Should the FOMC maintain their hawkish bias and outlook for interest rate hikes, the US dollar could regain ground.
Apart from that, Brexit concerns are also discouraging traders from putting funds in European assets and currencies, leading them to seek alternative investments such as bitcoin and ethereum. Fortunately for the latter, concerns about bitcoin network congestion are limiting that cryptocurrency’s gains.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com […]
