USD/TRY is consolidating in a wedge pattern
The lira is leading gains in the EM space today being up by more than 1% against the dollar. The greenback is a little weak to start the week but the lira's gains today is nothing more but a foreshadow of things to come for USD/TRY.
Much like how when you coil a spring, the release tends to be relatively violent. And whenever wedge patterns like this start forming, it's worth taking note. More so when it happens in a currency that is associated with extreme volatility over recent months. That only adds to the tightness of how much the spring is coiled.
The CBRT moved to raise the 1-week repo rate by 625 bps almost two weeks ago and since then the lira moved lower, then higher before retreating slightly as the resistance trendline is capping gains still.
It's all setting up for a nice wedge break to determine the next significant direction in the lira. That's the next big trade to go with if you're looking into this.
