USD/TRY Price Analysis: On track to retest record highs above 8.51

USD/TRY down but not out, as a test of all-time highs inevitable.
The spot wavers within a potential ascending triangle since March 22.
21-DMA is the last line of defense for the TRY sellers.

Dhwani Mehta FXStreet

USD/TRY has returned to the red on Wednesday, having faced rejection just below the 8.50 psychological level a day before.

Despite the retracement, the cross remains on track to retest the record highs of 8.5146, as the daily technical setup paints a constructive picture.

Note that the price continues to trade within an ascending triangle formation since the Turkish central bank shake-up, which smashed the lira to the previous record high at 8.4836 on March 22.

The trading range is getting tighter each passing day, as USD/TRY remains primed for a triangle breakout.

The risks remain skewed towards an upside break, given that the 14-day Relative Strength Index (RSI) continues to hold inside the bullish territory.

Adding credence to the positive outlook, a bull cross was spotted on Tuesday after the 100-daily moving average (DMA) sustained its break above the 200-DMA on a daily closing basis.

The ascending triangle breakout could call for the next upswing towards the 9.50 level. Ahead of that the 9.00 round number could be challenged.

USD/TRY: Daily chart

Alternatively, the bulls need to defend critical support around 8.35, which is the confluence of the rising trendline and upwards-loping 21-DMA.

A sharp sell-off towards the 50-DMA at 8.18 could be in the offing should the above-mentioned support cave in.

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.

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