TRY/JPY Heading Toward Significant Resistance Above - 20 November 2015

By: DailyForex.com

The TRY/JPY pair had a fairly neutral session during the day on Thursday, suggesting that perhaps we are running out of momentum to the upside. You can see that we have recently rallied in a rather significant move from the 39 handle. This pair, while not often traded by many of you is one that I actually prefer. The Turkish lira is of course a currency that people typically will only buy when they feel comfortable with taking risk. The high interest-rate in Turkey of course helps people get involved, and it of course makes for a nice strong positive swap at the end of the day in this marketplace. However, there are several things above that have me a bit concerned about the upward trend.

Convergence of Resistance

As you can see on the chart, I have marked the 200 day exponential moving average. It is currently just above current levels, and the 43.50 level is also important. That was an area where we have seen a bit of support and a bounce during the month of April, and of course resistance just a couple of weeks ago. At this point in time, it looks like we could possibly see some type of reaction. With this, I feel that the market is one that you will have to pay attention to over the next couple of days, but if we get some type of sell off in this area, I feel that we could head back down towards the bottom of the previous level, which would be roughly at the 41 handle.

On the other hand, if we can break above the 43.50 level on a daily close, I feel that the market will then reach higher, aiming for the 45 handle first. After that, we could continue to grind our way all the way up to the 100% Fibonacci retracement level, near the 47 handle. Hopefully, we will break out to the upside as we can not only make money on the move, but also on the positive swap.

TRYJPY

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.