USD/TRY Price Analysis: Approaching key support, deeper losses eyed

USD/TRY falls 0.50% despite broad US dollar strength.
Turkish lira extends recovery from record lows of 8.8049.
The spot eyes 100-SMA on 4H chart, as technicals remain in favor of bears.

Dhwani Mehta FXStreet

USD/TRY is seeing a six-day losing steak this Thursday, in a sustained correction from record highs of 8.8049 reached on June 2 after Turkey’s President Tayyip Erdogan spoke to the central bank governor about lowering interest rates in the next two months.

The spot ignores broadly firmer US dollar and Treasury yields, as the corrective decline remains at full swing. More downside remains in the offing, as depicted by USD/TRY’s four-hour technical chart.

The steady decline in the pair from all-time highs has carved out a falling wedge formation, with the price heading towards the lower boundary of the pattern.

At the time of writing, the spot is down about 0.50% on the day, testing multi-day lows just ahead of the 100-simple moving average (SMA) at 8.5249.

A breach of the latter could threaten the wedge support at 8.5138. The Relative Strength Index (RSI) continues to head closer towards the oversold territory, now at 32.10, leaving room for more downside.

The next relevant support area is seen at 8.47, the horizontal trendline in orange.

A bear cross, represented by the 21-SMA cutting through the 50-SMA from above, adds credence to a potential move lower.

USD/TRY: Four-hour chart

Alternatively, the confluence of the 21 and 50-SMAs at 8.6020 will act as a strong resistance, where the falling wedge hurdle also coincides.

Further up, buyers would look to test the June 7 high of 8.6902.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD: Downward-sloping trendline near 1.3470 remains key barrier

The British pound faces selling pressure against its major currency peers, trading 0.1% lower at around 1.3420 against the US Dollar during the European trading session on Tuesday.

EUR/USD flatlines above 1.1500, awaits US jobs data

EUR/USD holds steady around 1.1505 in European trading hours on Tuesday. Markets remain cautious ahead of a slew of US jobs data, starting with the JOLTS Job Openings Survey later today. However, the downside appears capped by hot Eurozone inflation in July, bolstering the case for a European Central Bank rate hike at the next meeting.

Gold holds steady above $4,050; hawkish Fed bets favor bearish traders

Gold remains confined in a range below the $4,100 mark through the early European session as traders opt to wait for further developments surrounding the Middle East crisis. Meanwhile, the uncertainty over US-Iran peace talks continues to act as a tailwind for the safe-haven US Dollar.

Aave: Bearish RSI divergence risks a 20% drop despite steady DeFi deposits

Aave (AAVE) extends a mild near-term recovery on Tuesday, holding above its 50-day Exponential Moving Average at $90.80. Aave protocol’s V3 deployment on Monad blockchain recorded over $500 million in deposits over the last month, reflecting increased user adoption.

US JOLTs report in focus

In the US, the June JOLTs report will be in the spotlight. Job openings have increased modestly this year, which has historically predicted rising wage cost pressures ahead. June trade balance data will also be released in the afternoon and the preliminary reading pointed towards a stable trade deficit from May. The Fed's Schmid (non-voter, hawk) will be on the wires overnight.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.