The pair followed the world as DXY has crossed beyond the 100 and EM currencies couldn't resist global dollar demand.
So, it's time to update the labels.
We are in yellow wave Y already and it reached the equal distance of wave W. Potentially it could tag the former top at 7.0830
where Y will be equal to 1.618 of W.
This will complete the wave X (white...
Turkish lira continuously weakening. The lowest price was reached in 2018 7.080 against US dollar, looks like the same level will be reached soon. Rising tention with EU about refugies, turism crisis (actually tourism is on of the main parts of the economy), so the mix of this two fundamental factors will push TRY lower.
The struggle for democracy is being carried out and as long as Erdogan remains at the helm there is only one direction for TRY. Autocrats are typically sticky in nature and difficult to remove, the attack should first be aimed at the currency which will be the base of the capitulation. Attacking the 7.8 will break local bank and looks imminent as markets receive...
USDTRY could dip now into 5.45 area to complete small wave X (white label).
Then the final move up with wave Y in larger degree X could emerge, which could tag former top of 7.0830.
After that the large Y to unfold down to retest the bottom of the entire consolidation at 5.1300
Symmetrical triangle violated ---- check
Fib level 0.705 taken out via double bottom ---- check
Upside previously tested via long wicks ---- check
Fundamental (news, macro etc) ----- check
Where do you think $TRY is going soon?
Not financial advise, course.
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Price formed an Ascending Triangle, that is a bullish pattern. We can initiate a long position if there is a confirmed breakout of Resistance level.
Thank you for reading this idea! Hope it's been useful to you and some of us will turn it into profitable.
Remember this analysis is not 100% accurate....
Turkish lira is near to its end, bow trading at 6.1096. Long term technical analysis shows corrections of this trend to S1 support level 5.9880, next target can be S2 level. This levels are calculating based on long term fibonacci retracement, also confirmation fo our analisys can be pattern wedge with trendlines T1-T2. Crossing of T1 will be a signal to sell USDTRY.
On the Turkey side we have updates coming from the local banks, a lot of interest in USD exposure as TRY is set to suffer further via spillover effects. The EM FX is all centred around coronavirus flows and the knock-on impact this will have on global growth, here looking for a dip back towards the lows, a fresh sweep would make it very easy to trade going into...
Turkey continues to stand out on the EM FX board, USDTRY finding strong support at the 5.97xx with sizeable USD demand signals from local Turkish banks. These same banks will be quick to cover should we breach the 6.00 handle and vulnerable to a squeeze once engaged.
In the very immediate term EM FX will be hijacked by the ebb and flow of coronavirus...
1) Potential double top forming on daily chart, near 6.00 round-number
2) US/TR 2-year yield differentials forming slight divergence
3) RSI forms a bearish divergence
4) Positioning and data support a stronger USD - possible headwind for the setup
5) Break above 6.00 invalidates the idea
