Ripple is bouncing off the area of interest highlighted in a previous article, indicating that bullish momentum is ready to return. This could take Ripple back up to the swing high at the 0.3000 psychological mark or higher.
This area of interest coincided with the 61.8% Fibonacci retracement level and was close to the moving averages dynamic inflection points. Speaking of moving averages, the 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. A larger pullback could still draw support from these dynamic support levels at 0.1800.
Stochastic is already pulling up from the oversold area to indicate a pickup in buying pressure so Ripple might follow suit. RSI hasn’t reached oversold levels but is also turning higher to signal that bulls are getting back in the game.
The US dollar has started the week off on shaky footing as Hurricane Harvey has revived oversupply concerns. Several refineries are shut down in the US Gulf Coast, leading to an excess in stockpiles after the pickup in production last week. The tropical storm is projected to head to Louisiana and might cause more flooding that is projected to weigh heavily on economic performance for this quarter.
Risk aversion is also present in the markets as Trump continues to talk about terminating NAFTA, likely increasing uncertainty when it comes to trade activity. The goods trade balance already indicated a lower contribution of exports to Q3 GDP data and traders are turning to the NFP next, as this would be the last major piece of data before the FOMC meets in September to discuss the timing of the balance sheet runoff and the next interest rate hike.
With that, cryptocurrencies are able to take advantage of risk-off flows away from stocks and commodities. At the same time, weak expectations for the NFP could keep the dollar’s gains in check while Ripple takes advantage of uncertainty surrounding bitcoin and bitcoin cash as well.