Source: PaxForex Premium Analytics Portal, Fundamental Insight
Ripple continues its legal battle with the SEC. It has not deterred traders, as they cheer company efforts in taking on the US government. The legal team may have gained a temporary upper hand after noting that Bill Hinman, the former director of the SEC’s Division of Corporate Finance, outlined in a 2018 speech that Ethereum is not a security. The SEC countered that Hinman voiced his opinion and not the SEC, while Ripple claims it discovered an e-mail chain contradicting the present SEC stance. It may not suffice to overturn the ongoing legal drama, and the XRP/USD remains vulnerable to lose the most recent gains.
The judge presiding over the case gave the SEC until October 15th, 2021, to respond. Ripple claims that the XRP token is not a security but drew SEC scrutiny following a $1.38M token sale to Santander and Moneygram. Traders now hope that developments at Ripple Labs will suffice to overcome the fallout from the SEC lawsuit. Moneygram moved away from Ripple and signed a partnership agreement with the Stellar Development Foundation to use the Stellar blockchain. While the rally in the XRP/USD was powerful, more bearish developments are on the horizon. The short-term risk remains to the downside.
The forecast for the XRP/USD turned cautiously bearish after the most recent price spike. This cryptocurrency pair reached extreme overbought territory, while the latest candlestick formed a hammer, a bearish signal. The Kijun-sen turned flat, confirming the absence of short-term upside pressures, and the Tenkan-sen is expected to follow suit. Adding to bearish momentum is the Ichimoku Kinko Hyo Cloud, after the Senkou Span A turned lower, ending its uptrend. Traders should wait for the CCI to move below 100 before entering their short positions. Can bears pressure the XRP/USD into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the XRP/USD remain inside the or breakdown below the 1.1200 to 1.2080 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.1530
- Take Profit Zone: 0.7880 – 0.8415
- Stop Loss Level: 1.2730
Should price action for the XRP/USD breakout above 1.2080, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.2730
- Take Profit Zone: 1.3970 – 1.4440
- Stop Loss Level: 1.2080
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