EUR/TRY traded sharply higher today, breaking above Friday’s peak of 11.215. Overall, the rate is trading above a tentative upside support line drawn from the low of October 7th, something that keeps the short-term outlook positive. Obviously, the broader picture is also positive as the daily and weekly charts point to a steep rally, with a record high being hit last Monday.
So, with all that in mind, we would expect the bulls to challenge once again that record, which is at 11.450, and then, they may take a short break, thereby allowing a pullback. However, if that pullback stays limited above the aforementioned upside line, we would see decent chances for another round of buying and perhaps a break above the record of 11.450. Now, with no prior highs and lows to mark the next potential resistance area, we would consider as such the 11.500 level, which is very close to the current record, and then, the 11.700k territory.
Taking a look at our short-term oscillators, we see that the RSI edged north and just poked its nose above its 70 line, while the MACD, lies above both its zero and trigger lines, pointing up as well. Both indicators detect upside speed and support the notion for further advances in EUR/TRY.
Now, in order to start examining the scenario of a deeper correction to the downside, we would like to see a drop below the low of October 26th, at around 10.930. This will confirm a forthcoming lower low on the daily chart, as well as a short-term failure swing top reversal. The bears may then get encouraged to push the action towards the 10.725 zone, near the low of October 20th, the break of which could allow declines towards the inside swing high of October 12th, at around 10.450.
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