Dollar Gain Versus Lira Faces Challenge From Converging Averages

  • 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.

    Before it's here, it's on the Bloomberg Terminal.