USDTRY

USD/TRY Trades Lower As CBRT Leaves Interest Rates Unchanged

The Central Bank of the Republic of Turkey (CBRT) has, as expected, left the 1-week repo rate unchanged at 19%. As a result, the USD/TRY continued its corrective move, stretching this into the 5th day.

Downside risks to consumer inflation in Turkey could provide the bank with the leeway it needs to commence an easing cycle in the 4th quarter. This would be in line with President Erdogan’s desires. However, the risks of rising global inflation is expected to rise as boatloads of cheap central bank funds starts to chase fewer goods. This will drive central banks to start raising rates or start early tapering of QE programs, putting the TRY in a difficult position.

Technical Outlook for USD/TRY

The downward movement of the pair is now challenging the combined support provided by the 8.57488 price level (9 June low) and the lower boundary of the ascending channel. If this level breaks down, the pathway towards the 8.36986 support (5 May high; 24-26 May lows) is blown open. Below this level, 8.29080 and 8.19744 become additional targets to the south if 8.36986 gives way.

On the flip side, a bounce on the 8.57488 support line allows the bulls to aim for 8.74610, with 8.8000 (21/25 June highs) lining up as an additional target to the north.

Don’t miss a beat! Follow us on Telegram and Twitter.

USD/TRY Daily Chart

Follow Eno on Twitter.

Related Posts: