From around the beginning of May, the Turkish Lira has been strengthening against its Japanese counterpart. TRY/JPY keeps on climbing higher, but is currently finding resistance again near the 19.311, which marks the highest point of July so far. There is a good chance that the rate could continue accelerating higher, as it is supported by a short-term upside line taken from the low of May 9th. That said, until we see a clear break above the 19.311 barrier, we will remain cautiously-bullish about the short-term outlook.
A strong push through the 19.311 level would confirm a forthcoming higher high, which could attract more buyers into the game. Such a move may lead the pair to its 200-day EMA, or the 19.591 hurdle, which is the high of April 17th. TRY/JPY might stall around that area, or even correct back down a bit. But if it stays above the 19.311 zone, we will remain positive over the short-term outlook. The bulls could take charge again and drive the rate beyond the 19.591 obstacle, targeting the 19.813 level, marked by the high of April 8th.
Our oscillators, the RSI and the MACD, are somewhat in support of the above-discussed scenario, as both indicators are showing positive momentum. The RSI is above 50 and points higher. The MACD is still above zero and recently crossed back above the trigger line. The indicator also points slightly to the upside.
Alternatively, a break below the aforementioned upside line and a rate-drop below the 18.800 zone, which is the low of July 24th, could spook the bulls from the field and set the stage for further declines. We will then aim for the 18.533 hurdle, a break of which might open the door to some lower support areas, one of which could be the 18.322 level, marked by the low of June 25th.
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