TRYUSD stuck within tight trading range
Turkish Lira/US Dollar (TRYUSD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, TRYUSD finished the week 1.31% higher at 0.1468 after losing 4 pips (-0.27%) today on low volume. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (TRYUSD as at May 22, 2020):
Friday's trading range has been 14 pips (0.95%), that's slightly below the last trading month's daily average range of 17 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for TRYUSD. Prices continued to consolidate within a tight trading range between 0.1461 and 0.1481 where it has been caught now for the last three trading days.
Despite a strong opening the currency closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on March 27th, TRYUSD lost -1.81% on the following trading day.
After having been unable to move above 0.1477 in the prior session, the forex pair ran into sellers again around the same price level today, missing to move higher than 0.1475.
While TRY/USD is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the nearby swing high at 0.1484 where further buy stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. Its common bearish interpretation has been confirmed for TRY/USD. Out of 163 times, TRYUSD closed lower 56.44% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 54.60% with an average market move of -0.45%.