5-3 EW Switched ON
The depreciation of the Turkish lira against the US dollar in the week of 5-10 August in the amount of 30% of its previous value looks simply ballistic on the daily and weekly chart. The reason for that would be the chilling relations between the US administration and Turkish leadership and the growing uncertainty of the Turkish direction on the global agenda. There is little fundamental motivation for the EURO to depreciate but sentiment and technical alignment. The US economy, however, is strong and FED hikes are increasing the demand for the greenback. The Head and Shoulder pattern on the daily chart could push the price to 1.05-1.07 area and possibly make the bottom of this year and next 5-10 years. A key support will be 1.118 which is a 0.618 FIBO retracement (low: 1.033, high: 1.255).
The 4h chart reveals a 5-3 EW development after breaking out of the pennant which possibly finished by now the first 3 waves. I believe the next two days will develop the 2nd corrective wave and make a peak on 1.1540 that would be the start of the 5th wave. The last wave could, therefore, descend below the 1.130 area. The data is mixed across indicators and bullish divergence is yet to develop on the 1h and 4h chart. The third monthly support is at 1.1356 which might provide support and so curb the 5th wave descend and be the start of an ABC corrective wave. The breakout would, eventually, be 300 pips long which is also the length of the base of the pennant.
Have a great trading week everybody!
The 4h chart reveals a 5-3 EW development after breaking out of the pennant which possibly finished by now the first 3 waves. I believe the next two days will develop the 2nd corrective wave and make a peak on 1.1540 that would be the start of the 5th wave. The last wave could, therefore, descend below the 1.130 area. The data is mixed across indicators and bullish divergence is yet to develop on the 1h and 4h chart. The third monthly support is at 1.1356 which might provide support and so curb the 5th wave descend and be the start of an ABC corrective wave. The breakout would, eventually, be 300 pips long which is also the length of the base of the pennant.
Have a great trading week everybody!
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