LTCUSD recently faked to the downside of its descending triangle pattern before bulls returned. Price has been on a tear and is setting its sights on the channel resistance visible on its 4-hour time frame.
This resistance is located around $72 at which several take-profit orders might be located. The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside, which suggests that the resistance could hold. However, the gap between the moving averages is narrowing to signal a possible crossover and return in bullish momentum.
Stochastic is already indicating overbought conditions and is gearing up to turn lower, drawing more sellers to the mix. In that case, LTCUSD could already resume its drop to the channel support before even hitting resistance.
RSI is also turning down from the overbought zone to show bearish pressure. Once it starts heading south, LTCUSD might follow suit and fall back to $56.
Dollar demand has taken a hit from the setbacks in tax reform as different versions from the House and Senate suggests that the political back and forth could extend until next year.
Meanwhile, litecoin has been able to benefit from reports that the bitcoin hard fork has been suspended. This removed the immediate cloud of uncertainty on the cryptocurrency market but also leaves bitcoin with no additional capacity. This problem will soon have to be tackled at some point down the line, though.
US banks are closed for the holiday today and there are no major reports due, which means that traders could continue to pay very close attention to tax reform updates. More setbacks could mean more dollar weakness, which cryptocurrencies like bitcoin and litecoin could take advantage of.
On the other hand, signs of a compromise among lawmakers to get tax reform done before the end of the year could mean a massive influx of funds to US companies, which would be positive for the dollar.