Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator.
After Litecoin’s massive gains and subsequent losses yesterday and this morning, some serenity might be returning.
Seeing as though the moves recently have been huge, it’s wise to zoom out and take a look at a broader picture of what’s happening in terms of technicals. Check out the LTC/USD Daily chart below (click to expand):
I’ve performed the Fibonacci study from the last major swing low on the D1 timeframe on the 8th of March at 15.14, until the high of this month (yesterday), at 21, which as we know, was a confluence of two essential levels, (the 161.8% Fib extension and the 50% retrace) as discussed in yesterday’s technical analysis. Plus, we explained how further bears were expected today, which of course has proved to be the case.
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Now, applying a new Fibonacci study via examining the Daily timeframe above, gives us even more information. Firstly, yesterday, price closed at around the 17.5 price mark because it was the 61.8% Fib retracement level (circled in blue). And secondly, price has right now, as I type, touched 16.4, which actually is the 78.6% Fib level (circled in red).
Ok, so what does this mean? Well, we’d need to zoom in a little to see if the 78.6% Fib level will hold or even provide a bounce. Hence, if we check out the H4 timeframe below, it becomes clearer how, with the Stochastics now in oversold territory, and the Accelerator Oscillator having turned green, there could be some valid support by way of 78.6%.
Of course, with the bear momentum still very strong, it’s unlikely this support will hold for much longer.
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