Lira remains constructive despite a number of obstacles but lacks clearer n/t direction signal
The pair holds in a choppy mode and lacks direction, after recovery attempt from two-month low at 5.1595 (31 Jan) was rejected and Monday’s trading closed below initial resistance at 5.2235 (falling 5SMA).
Tuesday’s action showed strong downside rejection (5.1827), keeping near-term direction in directionless mode.
Inflation in Turkey remains high and Jan CPI overshot forecast (20.35% vs 20.29% f/c and 20.30% prev), would keep the CBRT alerted, especially if coming data keep softening.
Daily studies give mixed signals as momentum is rising and slow stochastic heads north after reversal from oversold territory, conflicting daily MA’s in bearish setup.
Bears from recovery tops at 5.54 zone faces strong headwinds from key short-term support at 5.1350 base (low of pullback from new all-time high) and formed temporary base at 5.16 zone (31 Jan / 1 Feb lows), but so far lack strength for more significant recovery.
Falling 10SMA (5.2468) marks initial pivotal barrier, break of which would sideline existing downside risk, however, recovery needs to extend above converging MA’s at 5.3078/5.3273 zone (200/55/20/30) to neutralize bears and generate stronger positive signal.
Conversely, violation of 5.16 support zone would open way for test of 5.1350 base and risk extension of corrective phase from new record high at 7.1074.
Res: 5.2205; 5.2468; 5.3078; 5.3273
Sup: 5.1827; 5.1600; 5.1320; 5.0110