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USD/TRY is at a new yearly high near 18.00

  • USD/TRY resumes gains and approaches 18.00.
  • Renewed buying interest in the dollar lifts the pair.
  • Investors’ attention shifts to the July CPI release on Wednesday.

the turkish lira resumes its depreciation and raises the USD/TRY to new 2022 highs, approaching the 6:00 p.m. barrier on Tuesday.

USD/TRY is now pending the results of the IPC

After two consecutive daily pullbacks, USD/TRY regains bullish traction and approaches the key 18.00 barrier, or new all-time highs, on Tuesday.

The resurgence of risk aversion on nervousness from the US and China reinforces the better tone in the USD and the safe haven space, again putting the EM FX space under additional pressure.

Additionally, investors are expected to remain cautious in the coming hours ahead of the release of Turkey’s inflation figures for the month of July on Wednesday, with a consensus expecting the CPI to break above the 80.0% mark in the last twelve months. months.

What to keep in mind around TRY

USD/TRY bullish bias remains unchanged and remains on course to revisit the key 18.00 zone.

Meanwhile, the lira is expected to continue to oscillate around energy price developments, which appear to be directly correlated with developments in the war in Ukraine, general trends in risk appetite and the trajectory of Fed rates in the coming months.

Additional risks facing the Turkish currency also come from within, as inflation shows no signs of abating, real interest rates remain entrenched in negative, and political pressure for the CBRT to go rate Low interest rates remain ubiquitous. In addition, there does not seem to be a plan B to attract foreign exchange in a context in which the country’s foreign exchange reserves are decreasing day by day.

Technical levels

So far the pair is gaining 0.50% at 17.9491 and faces the immediate target of 17.9545 (2nd Aug high) seconded by 18.2582 (20th Dec all-time high) and then 19.00 (round level). On the other hand, a break of 17.1903 (weekly low Jul 15) would pave the way towards 17.0110 (55-day SMA) and eventually 16.0365 (monthly low Jun 27).

Source: Fx Street

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