USD/TRY Price Analysis: Rally pauses temporarily above 22.00

USD/TRY has witnessed a temporary pause in a rally to near 22.08.
A mild decline in hawkish Fed bets after the release of weak US Services PMI has trimmed the appeal of the US Dollar.
USD/TRY has already posted 10 consecutive positive settlements on a weekly basis.

The USD/TRY pair has witnessed a loss in the upside momentum after printing an all-time high of 22.08 in the late Asian session. The asset is expected to resume its upside journey as the sentiment about Turkish Lira has been soured after President Erdogan got another term. President Erdogan is working on reshuffling the cabinet and taking the economic policy in a new direction.

The US Dollar Index (DXY) has turned sideways after defending the crucial support of 104.00. The USD Index showed a corrective action after failing to surpass Monday’s high at 104.40. A mild decline in hawkish Federal Reserve (Fed) bets after the release of weak United States Services PMI has trimmed the appeal of the US Dollar.

USD/TRY has already posted 10 consecutive positive settlements on a weekly basis. The Fibonacci expansion tool plotted on the third week of December 2021 indicates that the asset has climbed above the 138.2% ratio placed at 21.58.

The Relative Strength Index (RSI) (14) is oscillating in the bullish range of 60.00-80.00, showing no signs of divergence but is in an overbought situation.

The USD/TRY pair is already in unchartered territory and a break above the intraday high at 22.34 will drive the asset toward round-level resistance at 23.00 and 23.50 respectively.

Alternatively, a decisive break below June 06 low at 21.20 will drag the asset toward June 02 low at 20.83 followed by May 31 low at 20.53.