The spike higher today stalled ahead of the record high from yesterday

We know the USDTRY has been racing higher (record low Turkish Lira) as political risk, debt /rate risk, sanction risk makes owning the currency a risky trade.

However, technicals help to smooth the risk, by helping to define risk and also defining a bias - even if it is a correction.

Looking at the hourly chart above, the pair moved above a topside trend line yesterday and raced to an all time high at 5.4174. The price moved back below the top trend line but stalled near a lower trend line. That support led to another move above the topside trend line in the London session. That run failed ahead of the high from yesterday. It failed again above the trend line.

The most recent decline took the price closer to the lower trend line and on the last move lower, the trend line held.

All that ups and downs, has now defined the trading channel.

At the high is the topside trend line.

Yes, the price moved above twice, and if it were to move above again, it would still be more bullish. We have to respect the line as a bullish/bearish bias line.

However, there are a number of points on that line that suggests the "market" is watching and we could/should see traders looking to sell near the level. Traders love to sell near all-time highs. If they can find a level to define and limit risk, they will put a toe in the water (regardless of the fundamental story).

On the downside, is the lower trend line which has done a good job at stalling falls (see green circle 4 today). Stay above is more bullish. Move below would be more bearish.

We currently trade in the middle of that range, as buyers and sellers battle it out.

If interested in trading, use the trend line levels to define risk (lean against) on rallies or falls. The buyers probably have more control - that is the trend and the fundamental story - but all good things do come to an end. So when there is lower highs and prices respect topside trend lines, it brings some balance to the market and the fight. We are in that phase right now.