The Turkish President Recep Ergogan has announced in a tweet that Turkey has begun a military incursion into Syria. This is a move which will be watched closely by the US, whose announcement of a withdrawal from the area after the rout of ISIS preceded this move.
US President Donald Trump had issued a threat in a Monday tweet to “totally destroy and obliterate” the Turkish economy if the incursion crossed the lines into areas Trump considers to be “off-limits”. The Turkish Lira could suffer greatly if the US decides to apply any punitive sanctions against Turkey.
Recall that the US had imposed sanctions that badly hurt the Lira after the arrest of a US citizen for the failed coup attempt of 2016. This led to the raising of interest rates by the Central Bank of the Republic of Turkey in an attempt to shore up the value of currency.
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USDTRY Technical Outlook
The USDTRY is edging higher on the back of the announcement. March 22, April 18 and August 29. This resistance level has been challenged over the course of the week. However, today’s daily candle has violated the trendline to the upside. Only when the candle closes can we determine the extent to which an upside penetration has occurred, if this is indeed the case.
In the near term, a break of the 5.8446 resistance line could open the door for a run to 5.93729 (April 26 and June 14 highs).
On the flip side, support lies on 5.74781 (June 11 and 26 lows) and below this area, the next support will be found at 5.65254 (August 20 and September 4 lows). Price needs a firm rejection at the present resistance to attempt a challenge of these levels.