TRYUSD closes above its opening price after recovering from early selling pressure
Turkish Lira/US Dollar (TRYUSD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
TRYUSD ended the month -1.64% lower at 0.1435 after gaining 5 pips (0.35%) today on high volume. Trading up to 7 pips lower after the open, TRY/USD managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (TRYUSD as at Jul 31, 2020):
Friday's trading range has been 17 pips (1.19%), that's above the last trading month's daily average range of 10 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for TRYUSD.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 0.1424 earlier during the day, the currency bounced off the key technical support level at 0.1426 (S1). The failure to close below the support might increase that levels importance as support going forward. The market found buyers again today around 0.1424 for the third trading day in a row after having found demand at 0.1422 in the prior session and at 0.1422 two days ago.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 0.1454. The last time this happened on May 7th, TRYUSD gained 0.50% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous two Lows" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for TRY/USD. Out of 185 times, TRYUSD closed lower 57.30% 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 63.78% with an average market move of -0.83%.