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by Charalambos Pissouros

EUR/TRY Breaks Below an Upside Support Line

EUR/TRY traded lower today, breaking below the tentative upside support line drawn from the low of December 1st. That said, the slide was paused slightly above the 6.600 zone, which is marked by the inside swing highs of December 23rd and 24th. That zone also coincides with the 100-EMA on the 4-hour chart. Thus, although the break below the upside line increases the chances for further declines, we prefer to wait for a dip below 6.600 before we get more confident on that front.

If such a break takes flesh, we could then see the bears driving the battle towards the 6.565 zone marked by the low of December 23rd. If that barrier is broken as well, then we may experience larger declines, perhaps towards the 6.510 zone, which is near the low of December 17th.

Turning our gaze to our short-term oscillators, we see that the RSI dipped below 50 and now stands slightly above 30. The MACD lies below both its zero and trigger lines, pointing down. These indicators detect negative momentum and support the case for the bears to stay in charge for a while more.

On the upside, we prefer to wait for a rebound above 6.693 before we start examining the bullish case. This would not only bring the rate back above the pre-mentioned upside line, but it would also confirm a forthcoming higher high. The bulls could the get encouraged to drive the battle towards the high of May 29th, at around 6.760, the break of which may extend the advance towards the peak of the day before, at around 6.800.

EUR/TRY 4-hour chart technical analysis

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