From all indications, this year has been a bad year for the green back. Checking price action in this chart, LTC gained a massive 1300% against the USD beginning from Q3 2017. After rallying from $7 in March, LTC topped at $97 in August 2017 where bears jumped in resulting in that double bar reversal pattern and lower lows relative to the upper BB in consequent sessions in the weekly chart. Either way, we want to take advantage of small moves in the 4HR chart.
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Determining trend direction is simple in the higher time frame, there is a stochastic sell signal in place and LTC is testing the 20 period MA. LTC will further loss value if that long-term support trend line is broken below. Because of the higher time frame precedence, we shall look to take short positions only in the 4HR chart frame when there are proper technical combinations.
In our preferred trading chart we note two things. First off, price action is moving within a descending channel marked by those minor resistance and support trend lines. The effective trading range is $10 between $61 and $51 which was tested yesterday. You also note that despite the 3-week USD bull charge, price action is held within October 10 to 15 high lows of $50 and $70. For bears, the major support trend line which is currently being retested is of great significance. 4HR stochastics are still bullish after turning from $50 support and until a sell signal is printed anyway around $54 and $58 range, patience is recommended. In fact, there is a bearish pin bar in place at the 20 period MA level which was also the upper limit of last week brief consolidation between October 24 and 28.
If incase LTC surge higher say to around the upper limit of this minor descending channel and towards resistance level at $58, then any reversal will entail a triple top. Already, as marked, a double top indicating October 24 and 30 highs is clear as shown.
To trade this, we wait and see what happens at current prices. If indeed there is a reversal with a bearish engulfing pattern forming, then we enter short and place a stop loss above $56. In case of further LTC appreciation, we wait for a reaction at resistance levels and the double tops in the then $6 range market.