- 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.
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.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.