EUR/TRY edged south today, breaking below the key support (now turned into resistance) barrier of 10.045, which provided support on June 14th, and prevented the rate from falling between July 18 and today morning. This makes the dip even more important, which combined with the fact that EUR/TRY is trading below the tentative downside resistance line drawn from the high of June 25, paints a negative short-term picture.
The break below 10.045 has confirmed a forthcoming lower low on both the 4-hour and daily charts, signaling the resumption of the prevailing downtrend. We now expect the bears to challenge the 9.9650 barrier, marked by the lows of May 6 and 7, the break of which could carry extensions towards the 9.8600 zone, which encouraged some buying on Apr. 28 and 29.
Taking a look at our short-term oscillators, we see that the RSI, already below 50, has moved closer to 30, while the MACD lies below both its zero and trigger lines, pointing down as well. Both indicators detect accelerating downside speed and support the notion for further declines in this exchange rate.
On the upside, we would like to see a rebound above the key resistance of 10.150 before we start assessing whether the outlook has brightened. This will not only take the rate above the pre-mentioned downside line, but it will also confirm a forthcoming higher high. The bulls may then push the battle towards the 10.225 level, marked by the inside swing lows of July 7 and 12, the break of which could encourage advances towards the 10.315 area, which provided resistance July 2 and 8.