Dollar Gain Versus Lira Faces Challenge From Converging AveragesBy
Moving averages are converging and have acted as resistance
Support at ichimoku base cloud looks set to be whittled
The dollar faces a fresh challenge on the charts after concluding its first monthly drop against the lira in six months.
The dollar-lira pair has found support in the past week at the base of the ichimoku cloud, which is at 3.6000 today, with the converging 21- and 55-day moving averages acting as resistance.
A bearish close today below the area of moving averages may herald further dollar weakness, sending the greenback toward support at 3.5561, its low on Feb. 23, and then the 100-DMA at 3.4892.
A drop in the 21-day moving average below the 55-day average would also reinforce the dollar’s downtrend.
The dollar fell 3.4 percent against the lira in February after rallying almost 28 percent in the five months earlier.
NOTE: Sejul Gokal is a FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.