Decline finds support at 8.00 and bounces to 8.20 as lira loses steam

The Turkish lira is having the best day in months against the US dollar, buoyed after the weekend’s events in Turkey and amid optimism regarding the COVID-19 vaccine that triggered a rally in markets around the world. The resignation over the weekend of Finance Minister Berat Albayrak triggered the rebound in the lira.

During the Asian session, the US dollar regained momentum against its G10 rivals and trimmed losses against emerging market currencies. Rising yields in the US and a modest pullback on Wall Street favored the USD / TRY rally. Still, the pair is down 4%.

The decline found support at the 8.00 area and at the time of writing it is trading at 8.1699, again above the 20-day moving average. The long and short-term uptrend remains intact. A drop below 8.00 would increase bearish pressure for a test of 7.8000, the next support. On the upside, 8.3500 is now immediate resistance, followed by the 8.4000 area.

Daily chart

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Credits: Forex Street

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