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USD/TRY remains trapped inside the range near 18.00

  • USD/TRY keeps trading erratic just below 18.00.
  • Turkey’s unemployment rate fell to 10.3% in June.
  • The US CPI is the next thing to watch on the agenda.

The Turkish lira loses some ground and motivates the USD/TRY to resume increases on Wednesday, always in the midst of the consolidated theme that prevails in several sessions.

USD/TRY remains capped at 18.00

USD/TRY fades Tuesday’s pullback and continues sideways for one more session, always amid bulls’ lack of conviction to advance above 18.00.

On the national calendar, Türkiye’s unemployment rate decreased slightly to 10.3% in June from the previous month.

Later in the session, all attention is expected to focus on the release of US inflation figures as measured by the CPI for the month of July.

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 oscillating around developments in energy and commodity prices – which are directly correlated to the events of the war in Ukraine – general trends in appetite for risk and the path of the Fed rates in the coming months.

Additional risks facing the Turkish currency also come from within, as inflation shows no signs of abating (despite rising less than expected in July), real interest rates remain entrenched in negatives and political pressure for the CBRT to go for low interest rates remains pervasive. Furthermore, there does not appear to be a plan B to attract much-needed foreign exchange, despite the recent increase in the country’s foreign exchange reserves.

key levels

So far the pair is gaining 0.46% at 17.9583 and faces the immediate target of 17.9874 (2022 high Aug 3) seconded by 18.2582 (all-time high Dec 20) then 19.00 (round level). On the other hand, a break of 17.1903 (weekly low Jul 15) would pave the way towards 16.2174 (100-day SMA) and eventually 16.0365 (monthly low Jun 27).

Source: Fx Street

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