USD/TRY has eased after Turkey’s President Erdogan made remarks that pushed the pair to its all-time high on Tuesday. Late on Tuesday, the Turkish leader hinted at interest rates cuts in the coming summer months despite the high inflation. Interestingly, the president fired central bank’s governor Naci Agbal for tightening the monetary policy.
The president’s comments came a day ahead of the country’s inflation data. TURKSTART is scheduled to release the CPI and PPI numbers on Thursday. Analysts expect consumer prices to have risen by 17.25% in May on a year-on-year basis. In the prior month, the CPI index rose by 17.14%, which was lower than the expected 17.30%. Higher-than-expected figures will help strengthen the Turkish lira. Later in the day, the US jobs data will further impact USD/TRY.
USDTRY technical outlook
After hitting an all-time high in the previous session, USD/TRY has pulled back to consolidate at around 8.6000. At the time of writing, the currency pair was down by 0.02% at 8.5901. On a two-hour chart, it is trading above the 5 and 10-week exponential moving averages. Based on these indicators, the pair is likely to record additional gains.
I expect USD/TRY to find support at 8.5738, which is along the 25-day EMA. On the other hand, it may rise to May’s resistance level of 8.6148. If the bulls manage to push the price past that level, the next target will be at Tuesday’s 8.6679.