USD/TRY Price Analysis: Bulls remain hopeful whilst above 21-DMA

• USD/TRY breaks to the downside but finds support at 21-DMA.
• The US dollar slump helped yield a range breakout in the pair.
• The upside potential remains intact amid bullish RSI.

USD/TRY is staging a solid comeback so far this Thursday, recovering from the lowest level in six days at 13.16.

The pair got sold-off into a broad-based US dollar slump, triggered by in-line with estimates US inflation data for December, which confirmed a March Fed rate hike.

The sell-off in the greenback was also driven by technical selling, as the US dollar index broke the horizontal channel on the daily chart to the downside.

The downside breakout in the spot offered a renewed buying opportunity in the lira. However, the beleaguered currency failed to hold onto the gains and slipped 3% in Thursday’s trading in the running, courtesy of the persistent concerns over soaring inflation in Turkey and unorthodox monetary policy.  

USD/TRY: Technical outlook

Looking at USD/TRY’s technical chart, the pair broke the four-day prison range to the downside, having failed several attempts to recapture the 14.00 level.

Bulls found fresh bids at the 21-Daily Moving Average (DMA) at 13.21, which has restricted the downside for now.

A sustained move below the latter will threaten the 13.00 level, below which the upward-sloping 50-DMA at 12.58 will lend support to USD/TRY.

The 14-day Relative Strength Index (RSI) is pointing north above the midline, suggesting that there is more room for recovery.  

Buyers need to find a strong foothold above the 14.00 threshold, above which the December 21 high of 14.14 will be put to test.

USD/TRY: Daily chart