After hitting the 6.244 barrier on May 9th, which is so far the highest point of this year, USD/TRY dropped sharply. But after finding support near the 5.947 hurdle, the pair started moving sideways and forming a triangle pattern. As we can see now USD/TRY is coiling up, and that is why we will remain neutral. We will wait for the rate to break through one of the sides of the triangle first, before examining a further directional move, at least in the short run.
If the lower side of the triangle breaks and the rate falls below the 5.985 support zone, marked by the lows of May 14th and 15th, this might give the bears advantage over the bulls, and they could send the pair towards the 5.947 hurdle. That hurdle acted as a strong support area on May 10th. If this time that area is not able to withstand the bear-pressure, a break of it could drag USD/TRY even further down, to test the 5.923 level, which marks lows of April 26th and 29th.
Our oscillators, the RSI and the MACD, are also somewhat neutral right now and not really showing a clear direction to either of the sides.
On the upside, a strong jump by USD/TRY could lead to a break of the upper side of the aforementioned triangle. But even then, we will remain cautious. In order to consider a further move north, we would like to see the pair breaking above the 6.086 barrier, marked by the high of May 15th. This would confirm a forthcoming higher high and the rate acceleration might pick up, as more buyers could be jumping in. Such a move may lift the USD/TRY to the 6.129 obstacle, a break of which could send the rate towards the 6.150 level, marked by the intraday swing high of May 10th.
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