USDTRY at Four Month Highs Amid War Operations in Syria
USDTRY adds 0.31% today at 5.9116 at five-month highs as the Turkish army operations in Syria continues. EU will discuss later today to impose sanctions on Turkey if they don’t stop the invesion in Syria. Meanwhile there are some reports that the Syrian army is on its way to support Kurdish areas, a development that might trap Turkey in a long war in the area.
OECD revised the forecast for Turkish economy to -0.3% this year. From – 2.9%. On the other hand, it did not change the projection for 2020 and expected the Turkish economy to grow by 1.6%. Turkey’s unemployment rate rose to 13% in June from 10.2%. The CBRT delivered a 325 bp interest rate cut to 16.50% more than markets expected. Markets were expecting 300 basis points interest rate cut from 19.75%. Tayyip Erdogan has put pressure on central bank (CBRT) to cut interest rates as he wants rates to be back in single digits.
On the technical side, the pair breached the 100-day moving average when the invasion started and also breached the descending trendline which started back in May 2019. The bull run from 5.45 recent lows (August 8th) stopped in early September at 5.85, a zone where the pair rejected three times since August 27th. The pair accelerated the upward move after the price pierced the descending trendline from May 23rd. The technical outlook is bullish, immediate resistance for the pair stands at 5.9194 today’s high and a break above might drive prices for a test of the next support at 5.9860 the high from May 30th. On the flipside, first resistance stands at 5.9025 today’s low, then at 5.7266 the 100-day moving average which now has turned into support, while more offers will emerge at 5.7087 the 50-day moving average.Download our latest quarterly market outlookfor our longer-term trade ideas.
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