USDTRY Could See Further Improvement in Near Term

Technical analysis of Forex market

USDTRY has advanced above the 20- and 40-day simple moving averages (SMAs) and the 23.6% Fibonacci retracement level of the sell-off from 7.1135 to 5.1330, around 5.5970 on Friday. Over the last couple of days, the price has been paring the losses that were posted at the beginning of this week, creating sessions with strong momentum.

Looking at the technical indicators, the stochastic is switching to the upside after the rebound on the 20 level and the bullish cross within the %K and %D lines. Furthermore, the RSI indicator is heading higher in the positive zone.

If the market corrects higher, the bullish action may pause initially near 5.7940 before attention shifts to the 38.2% Fibonacci of 5.8855. A rally on top of the latter would probably stage fresh buying pressure, with the price moving next to the 50.0% Fibonacci of 6.1200.

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On the other hand, dropping below the SMAs, could see losses extending towards the 5.3000 critical level. Even lower, the bears could stall around 5.1330 where the November sell-off stopped.

The recent bullish action turned the weak momentum to a more aggressive one, with the shorter-term moving averages (MA) increasing distance above the longer-term Mas, so we could expect further improvement in the market.

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