The USDTRY has stalled at the 8.50 level as uncertainty over the U.S. election continues. The media claims Joe Biden is one state from victory, but President Trump has claimed some of the contested states and wants the Supreme Court to intervene.
The election confusion has given traders a reason to step back from selling the Turkish Lira. The outlook for U.S. relations with Turkey could change, while the potential for different levels of stimulus spending is also a reason to wait for clarity. For the Turkish Lira, the recent negativity needs some form of catalyst to see at least a correction against the greenback.
A catalyst for the Lira could be an emergency rate cut in the Turkish economy after the central bank held rates steady last month, despite the fact that they raised their expectations for inflation to around 13% by year-end. Measures taken to slow the decline in the currency without a rate rise have failed and investors are now looking for a surprise hike.
Turkey’s finance minister Berat Albayrak said that the bank was not looking to intervene in the currency markets due to the “concern that a rate hike will decrease production and … employment”. The country’s leader has previously said this was his preferred method, which is counter to the rest of global central banks who will hike rates to combat inflation. For now, the USDTRY could consolidate with the election confusion but a rate rise could see a larger correction unfold.
USDTRY Technical Outlook
USDTRY has stalled at 8.50 in the last couple of days and is looking for direction. The highs around 8.575 would be the resistance for further gains but there is downside risk to the uptrend channel line. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
Don’t miss a beat! Follow us on Telegram and Twitter.
USDTRY Daily Chart
More content
- Download our latest quarterly market outlook for our longer-term trade ideas.
- Follow Kevin on Twitter.
- Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.