The Turkish Lira has been trading in a channel down against the Japanese Yen for the last three months. During this time, a new descending channel was formed. After failing to edge down to the bottom boundary of the senior pattern last week, the Lira reached its ultimate low of 28.04 and reversed to the upside. Meanwhile, the pair breaching the shorter-term pattern yesterday might point to appreciation in both short and medium term; however, the upper line of the senior channel is yet to be breached circa 28.65. It is likely that the pair edges lower in this session and tries to make a retracement from the breached channel. However, the combined support of the 55-, 100– and 200-hour SMAs at 28.35 should limit further loses. This area is expected to mark a point of reversal from which the Lira might start its momentum north.
