Overall, USD/TRY is still trading above its medium-term upside support line, taken from low of August 8th. After hitting resistance near the 5.934 zone on October 14th, the pair started sliding and it looks like it may end up testing the above-discussed upside line. As long as the rate stays above that upside line, we will class the current move down as a temporary correction before another leg of buying. This is why we will remain cautiously-bullish, at least for now.
A small drop below the 5.754 hurdle, marked by the low of October 18th, could force USD/TRY to test the aforementioned upside support line. If it holds, the rate might rebound and move back above the 5.754 hurdle. Such a move could get more buyers excited again, as it may increase the pair’s chances of pushing further north. We will then examine the 5.869 barrier, as our next potential resistance, which is the high of this week. If that barrier is a no-match for the bulls, its break may open the door for a move to the 5.934 level, marked by the high of October 14th.
Our oscillators, the RSI and the MACD, support the idea of seeing a small move lower first. The RSI is now closer to its 20 territory and continues to point lower. The MACD is below zero and its trigger line, and also points a bit lower.
On the other hand, if the previously-mentioned upside line breaks and the rate falls below the 5.710 hurdle, marked by the highs of October 3rd and 4th, this could spook the bulls from the field in favour of the bears. USD/TRY might then slide to the 5.666 obstacle, a break of which may send the pair to the 5.634 zone, which is the low of September 30th. The rate may stall around there, or even correct back up a bit. That said, if USD/TRY continues to trade below the aforementioned upside line, this could result in another round of selling, possibly bringing the pair to the 5.634 area again. If this time that zone surrenders to the bears and breaks, the next potential support level to consider might be the 5.587 level, marked by the high of August 18th.
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