- The Turkish lira performs better against the US dollar, earning more than 3%.
- USD / TRY is approaching October lows, moving further away from all-time highs.
The USD/TRY It fell below 8.00 and accelerated lower, reaching 7.8087, the lowest level since October 22. The Turkish lira continues to regain ground after falling to record lows last week.
The announcement of replacement at the Central Bank of the Republic of Turkey (CBRT) and the Minister of Finance over the weekend continues to support the lira. Another development adding to the TRY’s strength was Wednesday’s announcement of an increase in limited swapping for banks.
Now the focus is on what the CBRT will do next. “The CBRT will be forced to rise next week if it wants to keep the positive momentum of TRY alive. We expect the 1w buyback rate to increase by 575bp to 16.00%, ”explained the strategists at TD Securities.
Technical perspective
The long term still points to the upside for USD / TRY, and a rally above 8.00 could strengthen the dollar. However, at the moment, there seems to be more room as an extension of the correction.
“USD / TRY has been moving rapidly away from its recent all-time high of 8.5814 and has so far reached the 55-day moving average at 7.8091. Therefore, it is getting closer and closer to the Oct 22 low at 7.7808, which we expect to ease in the near future, in which case a major top formation will have been confirmed. In this case, the 2020 uptrend line at 7.4385 will be in focus, ”Commerzbank analysts wrote.
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Credits: Forex Street
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