Up until March 22nd, TRY/JPY had been on a steady move lower. But from March 22nd, when the Turkish Lira got hit, the pair sold off, falling to its key support area at 18.90, from which the rate then bounced back up. But the upside was once again limited by the short-term downside resistance line, taken from the high of December 3rd. For now, we can see the price action is maintained within a descending triangle formation, hence why we adopt a flat stance for now. But given the pair’s proximity to the downside line, we may see another slide towards the lower side of the triangle.
TRY/JPY might make another small push higher, but if it fails to break above the short-term downside resistance line, the bears may take it as a sign to step in and take control of the pair. The rate could then slide all the way to the 19.40 obstacle, a break of which could lead TRY/JPY towards a re-test of the previously-discussed support zone, at 18.90. This is where the bulls could try and fight back, which may cause the rate to stall around there for a bit.
On the upside, in order to examine higher levels, we would initially like to see a break of the downside resistance line and then a move above the 21.20 barrier, marked by the highest point of February. This way TRY/JPY could clear the path for itself towards the 22.00 obstacle, which if broken could lead the rate to the 22.70 resistance level, which previously acted as good support in July last year.
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