Technical Analysis – USDTRY rallies above 100-day SMA, but still range bounded

Technical Analysis – USDTRY rallies above 100-day SMA, but still range bounded

Anthony Charalambous, XM Investment Research Desk

USDTRY rally seized at 5.85, which is the 50.0% Fibonacci retracement of the down leg from 6.24 to 5.45. The bulls drove the price above multiple resistances within the trading range, which commenced around the beginning of September.

The short-term oscillators reflect mixed signals. The MACD has inclined above its red trigger line and into the positive zone, while the RSI is midway in bullish territory and heads down. The simple moving averages (SMAs) are skewed towards the positive picture. The 40-day SMA looks to complete a bullish crossover of the 100-day SMA, with the 200-day SMA slightly ascending.

To the downside, if sellers reverse the pair off the 50.0% Fibo of 5.85 initial support comes from 5.79 ahead of the 38.2% Fibo of 5.75. Moving down in the range the 100- and 40-day SMAs around 5.72 could apply some friction before the 200-day SMA at 5.64, which is also the 23.6% Fibo. Even lower, the spotlight could turn to the 5.58 support and swing low of 5.53.

If the buyers push above the 50.0% Fibo of 5.85 – which is also the upper boundary of the sideways market – the climb higher could have the bulls confront a significantly more durable resistance barrier at the 5.93 – 5.95 levels, which encapsulates the 61.8% Fibo of 5.94. Overcoming this, the pair could face another resistance region of 5.99 – 6.00 in its climb higher towards the swing peak of 6.15.

Summarizing, a break above 5.85 or below 5.64 would expose the short-term directional bias.

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