BTC/USD hit 7599 levels on Wednesday before closing at 7374 levels. The pair is currently trying to hold above 90-EMA and trading at 7340 levels at press time (Bitstamp).

On the topside, the pair is likely to face resistance at 7565 (trend line joining 9948.98 and 7599.98) and a break above would see it testing 7618 (100-DMA)/7728 (1w 20-SMA). Further strength would target 7861 (50% retracement of 99.48 and 5774.72)/ 7944 (Cloud top).

On the downside, a decisive break below 7319 (90-EMA) would see it testing 7227 (1h 50-SMA)/ 7180 (78.6% retracement of 6427.16 and 9948.98). Further weakness would drag it to 7019 (5-DMA)/6902 (38.2% retracement of 5774.72 and 7599.98)/6850 (1h 100-SMA).

Momentum studies: On the daily chart, MACD is above the signal line, RSI is above 50 and stochs at overbought levels. However, the shooting star formation and bearish stochastic divergence on the daily chart (image below) add caution to the pair’s further upside.

On the hourly charts, the pair is holding above major moving averages, suggesting scope for further bullishness. The pair is trading in a narrow range and a decisive break below a major support level is needed to confirm further downside in the pair.

Recommendation: Book partial profits, stay long. Trail SL to 6950. TP: 7730.