USD/TRY eyes a big technical breakout, as range tightens further ahead of US inflation
|- USD/TRY squeezes its range, as sellers continue to lurk just below 14.00.
- The lira remains supported by Turkey’s measures while the USD rebounds ahead of US inflation.
- Upside breakout from the current range appears likely amid bullish daily RSI.
USD/TRY is trading listlessly for the fourth straight day on Wednesday in the lead-up to the US inflation showdown.
Not surprising, markets are trading choppy, with a relatively better mood that is capping the US dollar’s rebound from the Fed Chair Jerome Powell-led blow. Powel sounded more cautious and less hawkish than anticipated at its confirmation hearing on Tuesday, as he put off the balance sheet reduction plans only to ‘later this year’.
The pair is slightly benefiting from the renewed uptick in the greenback but traders continue to show reluctance in placing any directional bets amid ongoing efforts by Turkey’s government to protect the lira and contain inflationary pressures.
The Official Gazette announced Tuesday that they would include corporate foreign currency and gold deposit accounts converted to lira in a scheme that protects local currency savings against exchange rate volatility, per Reuters.
USD/TRY: Technical outlook
Looking at USD/TRY’s technical chart, the pair is witnessing absolutely bare minimum volatility as the price range gets squeezed just under the 14.00 level.
Against this backdrop, with the fourth doji candlestick in the making on the daily chart, it appears to be an uphill battle for the bulls to yield a decisive breakthrough.
The 14-day Relative Strength Index (RSI), however, is holding comfortably above the midline, offering support to optimists.
A big upside breakout could be in the offing on a sustained move above the 14.00 threshold, putting the December 21 high of 14.14 in the spotlight once again.
On the downside, the previous resistance now support of the 21-Daily Moving Average (DMA) at 13.30 remains a strong barrier for the bears.
A sharp sell-off towards the January 3 low of 12.75 cannot be ruled if the latter is breached.
USD/TRY: Daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.