USD/TRY Price Analysis: Bears look firmer below 50-EMA, 13.70 eyed

• USD/TRY is juggling in a range of 13.97-14.00 on inverted flag formation.
• Divergence in price and the RSI have brought a reversal in the asset.
• Bears look firmer as the major is trading below 20 and 50 EMA.

The USD/TRY pair is oscillating in a tight range just below 14.00 in the Asian session, following a confident reversal on Wednesday after hitting the highs of 14.13.

On a 15-minute scale, USD/TRY has witnessed a steep fall after forming a bearish divergence, in which the price made the higher high from 14.11 to 14.13 but the Relative Strength Index (RSI) (14) oscillator didn’t follow the same structure and made lower high in Wednesday’s trading session.

Currently, the major is forming an inverted flag pattern, which signals a directionless move after a steep fall and points to a further downside if consolidation breaks lower decisively.

Generally, a consolidation phase denotes the placement of offers by the market participants who didn’t capitalize upon the initial rally or those investors place bids, preferring to enter in an auction once the bearish stage sets in.

The 20-period and 50-period Exponential Moving Averages (EMA) are scaling lower, which indicates more weakness ahead while the 200-period EMA is flat and hoping for no bullish reversal going forward.

The RSI (14) is oscillating in a range of 40.00-60.00, which adds to the downside filters.

For further downside, bears may find significant offers once the asset violates Thursday’s low at 13.98, which will drag the major towards Wednesday’s low at 13.85. Breach of the latter would expose it to Monday’s low at 13.73.

On the contrary, bulls can take the charge if the spot pierces 50-EMA at 14.40 on the upside, which will send the pair towards the 14.15 area - the confluence of Wednesday’s high at 14.13 and February 24 average traded price of 14.19.

USD/TRY 15-minute chart