USDTRY – recovery rally extends but faces strong headwinds from thick daily cloud base
The USDTRY pair rallied on Monday on broader dollar’s recovery, retracing so 50% of recent 3.8458/3.7153 bear-leg.
Recovery attempts were so far capped at 3.7868 and unable to clearly break pivotal barrier at 3.7800 (converged daily Tenkan-sen / Kijun-sen) which guards 3.7960 (Fibo 61.8%) and 3.8032 (base of daily Ichimoku cloud.
Cloud is thick and marks strong barrier which could limit recovery rally, before broader bears resume.
Larger downtrend from new record high at 3.9814 (22 Nov peak) is expected to continue after current month consolidation (3.7153/3.8458) completes and pair clearly breaks below cracked key m/t point at 3.7548 (Fibo 38.2% of 3.3883/3.9814 rally) and signals continuation of downtrend from 3.9814.
Conversely, penetration of daily cloud would sideline existing downside risk, but lift above 3.8458 (22 Jan lower top) is needed to neutralize and signal stronger recovery.
Res: 3.7868; 3.7960; 3.8032; 3.8150
Sup: 3.7740; 3.7627; 3.7431; 3.7294