Following last week historic plunge due to intervention tactics by the Turkish government and central bank, USD/TRY entered a recovery mod after hitting support at 10.20 on December 23rd and is now showing respect to an upside support line taken from the low of December 24th. In our view, this has changed the short-term picture back to positive.

Following last week historic plunge due to intervention tactics by the Turkish government and central bank, USD/TRY entered a recovery mod after hitting support at 10.20 on December 23^rd and is now showing respect to an upside support line taken from the low of December 24^th. In our view, this has changed the short-term picture back to positive.

We believe that a break above 13.40 could initially target the peak of December 21^st, at 14.00, where another break could extend the advance towards the high of December 13^th, at 14.60. If the bulls are not willing to stop there either, then a break higher could carry larger bullish implications, perhaps paving the way towards the inside swing low of December 17^th, at 15.63.

Shifting attention to our short-term oscillators, we see that the RSI moved higher, and it now lies slightly below its 70 line. However, it ticked down again. The MACD runs above both its zero and trigger lines. Both indicators detect upside speed, which supports the case for further advances in this exchange rate, but the fact that the RSI ticked down makes us careful over a potential pullback before the next leg north.

On the downside, we would like to see a clear dip below today’s low of 12.40 before we switch our view to bearish. This could confirm the break below the aforementioned upside line taken from the low of December 24^th. The bears could first target the 11.90 barrier, marked by the inside swing high of December 28^th, where a break could see scope for declines towards the low of December 27^th, at 10.75, or the low of December 23^rd, at 10.20.

USD/TRY 4-hour chart technical analysis

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