USD / TRY bounces from 2-month lows around 7.6000

  • USD / TRY falls to new lows around 7.60 on Friday.
  • The bullish momentum for the lira looks pretty solid.
  • The next CBRT meeting will be on November 19.

After making ground to new lows in the region of 7.60, USD/TRY manages to make a slight bounce to the 7.70 area at the time of writing.

USD / TRY centered on CBRT

Renewed and growing optimism around the newly appointed economic team in Turkey continues to support the lira and drag USD / TRY to fresh 2-month lows in the 7.60 region on Friday.

In fact, following the changes in the Turkish central bank (CBRT) and the resignation of the finance minister, along with the auspicious comments of President Erdogan, investors remain unchanged on the bullish stance on the lira.

Meanwhile, all attention is on next week’s monetary policy meeting by the CBRT, where the market consensus expects an interest rate hike of at least 500 bps to restore some stability and credibility both in the currency as in the country.

Also helping the optimistic momentum in TRY, market participants now perceive that the Erdogan administration could be closer to starting to implement much-needed structural reforms to get Turkey back on the path of economic growth and stability.

It is worth mentioning that the lira appreciated almost 12% in the last five sessions. Furthermore, the Turkish currency is about to close its first week with gains after ten consecutive weeks closing in negative territory. Also, since the last 16 weeks, the lira managed to register gains in only 3 of them.

Technical levels

At the moment, the pair has risen 0.18% to 7.6738 and a drop below 7.6000 (monthly low on Nov 13) would expose 7.5312 (38.2% Fibonacci from 2020 rally) and then 72019 (minimum of August 21). On the other hand, the next hurdle is located at 7.9312 (23.6% Fibonacci from the 2020 rally) followed by 8.5777 (all-time high on November 6).

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