USD/TRY technical analysis: Upside favored on falling wedge breakout

• USD/TRY's daily chart shows a falling wedge breakout, a bullish reversal pattern.
• The daily chart RSI is also reporting bullish conditions.
• The pair could test the immediate resistance at 5.77275 in the short-term.

USD/TRY is looking north, having breached a three-month-long falling wedge on the higher side on Monday.

The pair closed at 5.6557 on Monday, confirming an upside break of the falling wedge, represented by trendlines connecting May 9 and July 25 highs and June 5 and Aug. 8 lows.

A falling wedge breakout is a bullish reversal pattern, meaning the pullback from the May 9 high of 6.24579 has ended and the bulls have regained control.

The 14-day relative strength index (RSI) is also reporting bullish conditions with an above-50 print.

USD/TRY, therefore, looks set to test the resistance at 5.77275 (July 25 high). A close above that level would invalidate the bearish lower highs pattern and allow a rally to highs above 6.00.

The wedge breakout would be invalidated if the pair finds acceptance below Monday's low of 5.56252.

Daily chart

Trend: Bullish

Key levels

Resistance: 5.77275, 5.9326

Support: 5.56252, 5.44947