• Offers at the upper boundary of the Rising Channel favor a short-term correction.
• The formation of Doji candlestick pattern adds to the downside filters.
• The RSI (14) is indicating an extremely overbought situation.

The USD/TRY pair is oscillating around 16.30 in the early European session. The asset has faced barricades around 16.45 last week after a firmer upside move from May 5 low at 14.68.

The Turkish lira bulls have defended the upper boundary of the Rising Channel. The upper ascending trendline of the chart pattern is placed from January 3 high at 13.94 while the lower boundary is plotted from Fed low at 13.27. The presence of barricades around the boundary of a Rising Channel chart formation indicates a correction in the counter. An expectation of a correction has been bolstered on activation of the Doji candlestick pattern formed on Thursday. However, the formation of a Doji doesn’t work in isolation.

Advancing 20- and 50- period Exponential Moving Averages (EMAs) at 15.77 and 15.18 add to the upside filters.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 60.00-80.00 range that supports the bullish momentum. However, an overbought situation cannot be ruled out.

A drop below Friday’s low at 16.19 will drag the greenback bulls towards the round-level support at 16.00, followed by the 20-EMA at 15.77.

On the flip side, the greenback bulls could extend their gains to the 12 December 2021 opening price and the round-level resistance at 16.60 and 17.00 after overstepping Thursday’s high at 16.47.

USD/TRY daily chart