- USD/TRY’s bullish bias wavered around 14.90 on Tuesday.
- Markets in Turkey are closed due to the Eid al Fitr holiday.
- Turkey’s inflation figures will take center stage on Friday.
The Turkish lira finds some buying interest after the renewed position offered in the dollar and motivates the USD/TRY to make a U-turn after hitting multi-week highs around 14.90 earlier in the session.
USD/TRY is now focused on the yearly high near 15.00
USD/TRY posted gains in eleven of the last thirteen sessions due to the relentless rally in the dollar and persistent exits from the EM FX space.
Indeed, the prospect of further tightening by the Fed keeps the currency space under intense downward pressure, falling in line with the broader sentiment affecting the risk complex.
In the Turkish debt market, 10-year government bond yields have rebounded from recent lows in the 20% area and are back at the 21% level and beyond.
Going forward, Turkish markets are expected to return to normal activity towards the end of the week, when key inflation figures for the month of April are released along with producer prices and the manufacturing PMI.
What to look for around TRY
The lira keeps the range bound theme unchanged against the dollar, always in the area below the 15.00 zone for now. Price action in the Turkish currency so far is expected to revolve around energy price performance, broad risk appetite trends, Fed rate path and war developments in Ukraine. Additional risks facing TRY also stem from domestic tensions, as inflation shows no signs of abating, real interest rates remain entrenched in negative, and political pressure to keep the CBRT biased towards low interest rates remains pervasive.
Technical levels
So far the pair is retracing 0.19% to 14.8375, a drop below 14.6150 (monthly low Apr 1) would expose 14.5136 (weekly low Mar 29) and finally 14.4915 (55-day SMA). On the other hand, the next hurdle appears at 14.9889 (11 Mar 2022 high) followed by 18.2582 (20 Dec all-time high) and then 19.00 (round level).
Source: Fx Street
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