• USD/TRY squeezes its range, as sellers continue to lurk just below 14.00.
  • The lira remains supported by Turkey’s measures while the USD rebounds ahead of US inflation.
  • Upside breakout from the current range appears likely amid bullish daily RSI.

USD/TRY is trading listlessly for the fourth straight day on Wednesday in the lead-up to the US inflation showdown.

Not surprising, markets are trading choppy, with a relatively better mood that is capping the US dollar’s rebound from Fed Chair Jerome Powell-led blow. Powel sounded more cautious and less hawkish than anticipated at its confirmation hearing on Tuesday, as he put off the balance sheet reduction plans only to ‘later this year’.

The pair is slightly benefiting from the renewed uptick in the greenback but traders continue to show reluctance in placing any directional bets amid ongoing efforts by Turkey’s government to protect the lira and contain inflationary pressures.

The Official Gazette announced Tuesday that they would include corporate foreign currency and gold deposit accounts converted to lira in a scheme that protects local currency savings against exchange rate volatility, per Reuters.

USD/TRY: Technical outlook

Looking at USD/TRY’s technical chart, the pair is witnessing absolutely bare minimum volatility, as the price range gets squeezed just under the 14.00 level.

Against this backdrop, with the fourth Doji candlestick in the making on the daily chart, it appears to be an uphill battle for the bulls to yield a decisive breakthrough.

The 14-day Relative Strength Index (RSI), however, holding comfortably above the midline, offers support to the optimists.

A big upside breakout could be in the offing on a sustained move above the 14.00 threshold, putting the December 21 high of 14.14 in the spotlight once again.

On the downside, the previous resistance now support of the 21-Daily Moving Average (DMA) at 13.30 remains a strong barrier for the bears.

A sharp sell-off towards the January 3 low of 12.75 cannot be ruled if the latter is breached.

USD/TRY: Daily chart

This article was originally published by Fxstreet.com.Read the original article here.