USDTRY: possibility of a more significant correction occurring

The USDTRY pair continues to face downward pressure, testing the lower boundary of its recent consolidation range around the 31.800 mark.

Indicators on the daily chart are hinting at the possibility of a deeper correction, reminiscent of the scenario observed back in August 2023. Momentum indicators have dipped into negative territory, accompanied by a breach below the converging 10/20-day moving averages, indicating a potential bearish crossover.

Weekly indicators suggest overbought conditions, although confirmation is still pending.

A decisive breach below the crucial support level at 31.800 would confirm the bearish outlook, potentially triggering a completion of a double-top pattern and paving the way for a more significant pullback.

Conversely, failure to breach lower could prolong the consolidation phase, keeping larger bullish sentiments intact and preserving upside potential.

Fundamentally, there are signs of optimism for the lira, especially with Turkey’s interest rates rising to 50% the previous month, enhancing the currency’s attractiveness to investors.

Should the lira’s recovery gain momentum, it could significantly alter the landscape, given its prolonged downtrend over the past nearly three years.

Res: 32.16; 32.32; 32.44;32.56

Sup: 31.80; 31.23; 30.71; 30.30