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Technical Analysis – USDTRY opens with gap and drops sharply below cloud

USDTRY opened with a gap lower on Monday at 2.8261 compared to Friday’s close of 2.9144. The pair subsequently fell sharply after opening to reach 2.7574 where it found support at 2.7568. This is the 61.8 Fibonacci retracement level of the upleg from 2.5598 to 3.0749. Prices then bounced back up to the 50% Fibonacci at 2.8178.

Most daily technical indicators are giving bearish signals – the RSI is below 50 and pointing down. The tenkan-sen is below the kijun-sen line and prices are below the Ichimoku cloud. All these indicators support a bearish bias in the near term.

The market has retraced 61.8% of the rise from 2.5598 from April and fell from a record high of 3.0749 reached on September 24. As long as prices remain above the 61.8% Fibonacci, we could say the market is correcting the prior uptrend. A drop below this level (2.7567) would see a risk of shifting the bias to bearish, especially a fall below the 76.4% Fibonacci at 2.6696.

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