Last week’s strong move higher in USDTRY was the 3rd up week in a row – extending the rally from September’s low for 2017. Our medium term signals had been bearish since April with the market falling by 16 big figures at the low. But the important aspect of last week’s rise was confirmation of a change in sentiment to bullish.

The USDTRY 21 week moving average was broken by investor demand and at the same time, the RSI moving average was also breached (The bearish trigger in RSI actually preceded the spot cross by several weeks).

These ‘golden’ crosses point to higher levels for USDTRY in the coming weeks with the market expected to focus on 3.6475 then 3.7820.

There is one concern that needs to be kept in mind however. Prices are testing the top of the weekly Ichimoku Cloud pattern and we need to see an early break above that point to keep the bullish momentum intact. USDTRY has been above (occasionally inside) the Cloud since May 2013 and any move below would later the dynamics of this currency pair in a big way.

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