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  • USD/TRY bulls looking for meanwhile run to resistance.
  • Weekly prospects are far more compelling in a positive EM-FX environment.

In an extension of the following analysis: USD/TRY Price Analysis: Bulls can’t catch a break, yet, bulls have finally broken the resistance structure.

Spreads may be too wide to consider the following set-up, depending on the broker, but a raw spread account in higher liquidity times of trade may enable the setup. 

Recalling the previous analysis, a bullish swing trading set up was established on the daily chart and bearish on the weekly.

The upside offers the first prospect opportunity and the environment has just turned favourable for the bulls to enter at market for a 1:3 risk-reward trading opportunity. 

The following was the original blueprint for the trade set-up:

However, there was still some work left to do and, 1), the price needed to get above the 21-moving average, 2) MACD had to be above the zero-line to confirm a bullish price action environment. 

We now have this bullish environment, but again, the US dollar is not in favour at the moment, so this is a risky trade set up and should be treated as so. 

The lira has been in favour, outperforming its peers in November.

We have seen foreign investors buying vast amounts of Turkish bonds and stocks since Turkey made a dramatic U-turn towards market-friendly policies. 

We also have seen a proper rate hike to stabilise the lira.

Looking more broadly, the pace of capital inflows to emerging markets has accelerated sharply so far in Q4. This will bode well for the weekly trade set-up which can be treated with higher risk. 

However, the basis of pure technical analysis trading is to trade what you see with your trading strategy.