USD/TRY PRICE ANALYSIS: A PULLBACK TOWARDS 15.50 LOOKS LIKELY AS RSI TURNS EXTREMELY OVERBOUGHT

• The asset is experiencing volumes and wider ticks on the upside break of the Darvas Box.
• The RSI (14) near 90.00 is displaying signs of an overbought situation.
• Advancing 20- and 50-EMAs are favoring the greenback bulls.

The USD/TRY pair is hovering around 15.90 in the Asian session after a perpendicular rally. The asset has displayed a nine-day winning streak and has extended further after overstepping Tuesday’s high at 15.92.

An upside break of the Darvas Box chart pattern underpinned the greenback bulls. Usually, a break of the Darvas Box indicates volatility expansion, which results in heavy volume and wider ticks. The above-mentioned chart formation placed in a range of 14.39-15.06 on the daily scale.

The 20- and 50-period Exponential Moving Averages (EMAs) at 15.20 and 14.80 respectively are scaling higher, which adds to the upside filters. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80, which signals a continuation of bullish momentum. It is worth noting that the momentum oscillator, RSI (14), is displaying overbought signals as the oscillator is nearing 90.00, so a pullback move cannot be ruled out.

A pullback move towards the round level support at 15.50 will trigger a responsive buying action that will drive the asset towards Tuesday’s high and 20 December 2021 opening price at 15.92 and 16.60 respectively.

Alternatively, the Turkish lira could gain control if the asset drops below the 9 May low at 14.92. The occurrence of the same will drag the asset towards April 12 low at 14.55, followed by the psychological support at 14.00.

USD/TRY DAILY CHART