Litecoin continues to move inside its ascending channel on the 4-hour time frame and is still hovering around support. This lines up with the 50% to 61.8% Fibonacci retracement levels and the moving averages’ dynamic inflection points.
Speaking of moving averages, the 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. This means that a reversal from the uptrend is still a possibility. However, it could also mark a larger pullback to the broken short-term descending trend line and former triangle resistance.
Stochastic is pointing down to signal that bearish pressure is present while RSI is also on its way lower so LTCUSD might follow suit. A break below the channel support could lead to a test of the $50 level next.
Litecoin appears to be trailing bitcoin in selling off after hearing news of the hard fork suspension since this uncertainty is likely to come up again in the future. However, this rival cryptocurrency is able to hold its ground somewhat and could enjoy a return in investor interest soon.
Also, the dollar is under selling pressure on setbacks to tax reform. The versions of the House and Senate have key differences and it might take some time before lawmakers see eye to eye or come up with a proposal that they can both pass. The House is due to vote on their version this week and GOP infighting could also pose headwinds to approval.
US CPI and retail sales are also lined up later this week and any surprises could mean bigger moves for the dollar. A December Fed rate hike is mostly priced in but a huge disappointment could still spur doubts. On the other hand, a large upside surprise could bolster tightening hopes throughout next year and could mean more gains for the dollar versus litecoin.