USDTRY stuck within tight trading range
US Dollar/Turkish Lira (USDTRY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, USDTRY finished the week -1.28% lower at 6.8118 after gaining 161 pips (0.24%) 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 (USDTRY as at May 22, 2020):
Friday's trading range has been 657 pips (0.97%), that's slightly below the last trading month's daily average range of 836 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 USDTRY. Prices continued to consolidate within a tight trading range between 6.7500 and 6.8437 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After having been unable to move lower than 6.7683 in the previous session, USD/TRY found buyers again around the same price level today at 6.7780. The last time this happened on Wednesday, USDTRY gained 0.07% on the following trading day.
While the FX pair is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the close-by swing low at 6.7364 where further sell 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 Higher Closes" stand out. Its common bullish interpretation has been confirmed for USD/TRY. Out of 166 times, USDTRY closed higher 57.83% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.42% with an average market move of 0.59%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.47% and EURUSD closing -0.44% lower. On the flipside the best performers have been USDCAD closing 0.33% higher and USDCHF gaining 0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more