USD/TRY outlook: Risk of deeper correction exists
USD/TRY
USDTRY remains at the back foot and pressuring the floor of near-term consolidation range at 31.800 zone.
Signals of a deeper correction (last seen in August 2023) are developing on daily chart, as momentum indicator slid into negative territory and the price action broke below 10/20DMA’s which are converging and on track to form a bear cross.
Overbought weekly studies add to the notion, however, signals still need confirmation.
Firm break of a higher base and pivotal support at 31.800 zone, will validate bearish signal and boost it on completion of a double-top pattern and open way for deeper pullback.
Conversely, failure to break lower would keep the price in extended consolidation (sideways mode, but larger bulls will remain unharmed and keep the risk at the upside.
Fundamentals are getting brighter for lira, as Turkey’s interest rate rose to 50% last month, making the currency more attractive for investors.
If lira’s recovery pick up, it would significantly improve the picture, as the currency has been in a steep downtrend in past almost three years.
Res: 32.16; 32.32; 32.44;32.56.
Sup: 31.80; 31.23; 30.71; 30.30.
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
