USDTRY unable to break through key resistance level
US Dollar/Turkish Lira (USDTRY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
USDTRY ended the month 1.68% higher at 6.9687 after losing 259 pips (-0.37%) today on high volume. Trading 326 pips higher after the open, the pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (USDTRY as at Jul 31, 2020):
Friday's trading range has been 840 pips (1.2%), that's above the last trading month's daily average range of 464 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for USDTRY.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top.
Unable to break through the key technical resistance level at 7.0019 (R1), the currency closed below it after spiking up to 7.0226 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. The market ran into sellers again today around 7.0226 for the third trading day in a row after having found sellers at 7.0309 in the prior session and at 7.0316 two days ago.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 6.8786. The last time this happened on May 7th, USDTRY lost -0.49% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous two Highs" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for USD/TRY. Out of 184 times, USDTRY closed higher 58.70% 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 64.67% with an average market move of 0.94%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more