USDTRY trade close to daily highs after the Central Bank of Turkey left its one-week repo auction rate unchanged at 8.25% for the second consecutive policy meeting. It also left the overnight borrowing interest rate and overnight lending rate at 6.75% and 9.75%, respectively.
The Monetary Policy Committee said that maintaining a disinflation process is a critical factor for lower sovereign risk, lower long-term interest rates, and more reliable economic recovery. The central bank will continue with a cautious monetary stance. The monetary position will be determined by considering the indicators of inflation to support the continuation of the disinflation process. CBRT will continue to use all available tools in pursuit of the price stability and financial stability targets.
USDTRY Reaction To Central Bank of Turkey Decision
USDTRY resumes today the upward trend that started in late July while after the Central Bank of Turkey kept interest rates unchanged the pair added some pips approaching the daily highs at 7.34.
FOMC Minutes Boost USD
Yesterday the minutes of the latest Federal Reserve policy meeting provided some support to USD. FOMC said that the path of the recovery would depend on the containment of the coronavirus. The coronavirus crisis would weigh on the economic activity and employment and is posing downside risks to the economic picture over the medium term.
USDTRY Daily Technical Analysis
USDTRY is 0.69% higher at 7.3458, as the pair resumes the upward trend after three days of correction. In the technical picture, nothing has changed despite the recent correction, which just helped the pair to exit overbought levels. The corrections would offer an entry point for longs.
USDTRY resistance stands at 7.3490 the daily top. If the pair moves above, then the next level to watch is 7.3874 the high from yesterday’s trading session. The next supply zone waits at 7.4021 the all-time highs.
On the contrary, support would be met at 7.2811 today’s low. Next support area is at 7.2066 the lower level from yesterday’s session. The critical support is at 7.00, which if breached bears would take control at least for the short term.
USDTRY Daily Chart