USD/TRY (U.S. DOLLAR/TURKISH LIRA)

U.S. dollar is gaining strength against most of the developed and emerging market currencies. I analyzed USD/TRY in the previous updates and drew attention to the bullish outlook on the dollar versus Turkish Lira. In mid-2011, cross rate broke above 1.75 levels and since then it has been consolidating between 1.75 and 1.90. Last year’s consolidation appears to be a flag formation; usually considered to be a bullish continuation pattern. As long as 1.75 holds as a medium-term support, breakout to higher levels will remain likely. Breakout above 1.83 levels could initiate another upward spike on the USD/TRY towards 1.92 levels.